Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

The Secretary of State was asked—

Tuition Fees

Mr. Michael Fabricant: If he will make a statement on tuition fees for tertiary education in Scotland. [84126]

The Secretary of State for Scotland(Dr. John Reid): The policy on tuition fees, announced in July 1997 by my right hon. Friend the Secretary of State for Education and Employment, remains throughout the United Kingdom. From 1 July, education—and so the conduct and outcome of the review being conducted at the Scottish parliamentary level—will be a matter for the Scottish Parliament.

Mr. Fabricant: First, I congratulate the right hon. Gentleman on his promotion to the Scottish Office. I hope that it will not be too long before he is promoted to the position of Secretary of State for Defence—which is where, I suspect, his true interests lie. However, before he gloats too much at the victory of his right hon. Friend the Member for Glasgow, Anniesland (Mr. Dewar) over the fawning Liberal Democrats in Scotland, does he think that, while the United Kingdom is still the United Kingdom, it is fair that some students studying at United Kingdom universities should be disadvantaged in comparison with other students studying at United Kingdom universities?

Dr. Reid: I think that we strengthen the unity of the United Kingdom by recognising our diversity, which is precisely one of the reasons why we have devolved decision making to Scotland and to Wales, and why we are on the verge of doing so to Northern Ireland and to London. Perhaps, in future, we shall do so also to other areas. I think that the vast majority of people across the United Kingdom will be gratified that the Government are ensuring that local decisions affecting local people are being taken at a more local level.

Ms Sandra Osborne: I join in welcoming my right hon. Friend to his first Question Time in his new role as Secretary of State. Will he confirm that it is estimated that as many as 40 per cent. of students will pay no tuition fees at all?

Dr. Reid: I thank my hon. Friend for her congratulations. I can also tell her that although it was

estimated that about 40 per cent. of those entering Scottish higher education would not pay any tuition fees at all, according to the latest figures that we have, more than 50 per cent. will pay no tuition fees at all. She will know that the entire purpose of our policy is to extend higher education in Scotland to a far greater number of people than has hitherto been the case. Moreover, the fact that more than 50 per cent. will pay no tuition fees demonstrates that a greater number of people from low-income groups will now have access to education, which surely must be one of the priorities of any decent, civilised Government.

Mr. John Swinney: On behalf of the Scottish National party, I congratulate the right hon. Gentleman on his appointment to Secretary of State. He will be aware that there is a partnership document involving the Labour party and the Liberal Democrats in the Scottish Parliament. Is it his understanding that, when the inquiry on tuition fees reaches its conclusions, the Liberal Democrats will have a free vote on the matter—or will they just take the Labour Whip?

Dr. Reid: You will know, Madam Speaker, and the hon. Gentleman will know that matters of procedure within the Scottish Parliament, and within the parties in the Scottish Parliament, are entirely for that Parliament and those parties. However, I thank the hon. Gentleman for his congratulations. I also urge him to consider whether the main aim of any civilised party in modern Scotland should not be to ensure that educational opportunities are extended to the maximum number of people so that young people are able to liberate their talents and achieve their full capabilities—especially those on lower incomes, who will benefit from the arrangements introduced by the Government.

Mr. Jim Murphy: I welcome my right hon. Friend to the Dispatch Box as Secretary of State for Scotland. Traditionally, the debate has focused on the ancient universities in Scotland and on those attending them. Is my right hon. Friend today able to provide specific figures on the participation in higher education of those who are from low-income backgrounds, and on the participation of those attending further education colleges in Scotland, where the majority of Scotland's students study? Our policy will succeed or fail on that type of measurement.

Dr. Reid: My hon. Friend is quite right. I have already mentioned that, this year, more than 50 per cent. of entrants to Scottish higher education will pay no tuition fees. As he will know, because of the arrangements that we have made, anyone whose parental income is less than the average will pay nothing at all in tuition fees. The figure of more than 50 per cent. is not only much higher than estimated, but indicates that, for the first time, we are increasingly providing people from low-income backgrounds with the opportunity of higher education. Moreover, the figure in Scottish further education colleges will be 70 per cent.
We should be proud of those figures, and of the fact that more than 47 per cent. of young people in Scotland now go into higher education. I am not as old as some people may think I am, but 20 or 30 years ago—30, actually—when I went to university, the proportion of


people in Scotland attending higher education was only one in 20; now, we are achieving a proportion of one in two. That is to the credit of this Government.

Dr. Liam Fox: The Secretary of State is in fact older than I thought he was before he gave that reply.
I welcome the Secretary of State to his new post. He arrives there with an advantage over most Secretaries of State, in that he has the genuine affection and good will of many hon. Members, which many Secretaries of State do not begin with. However, does he believe that, leaving aside the legality, it is fair or desirable for Members of this place who are also Members of the Scottish Parliament to come here to vote to apply tuition fees to English and Welsh students, but then to go to the Scottish Parliament to exempt Scottish students from those fees?

Dr. Reid: I think that people who vote in different ways in two different areas will have to resolve that problem themselves, irrespective of their parties. The purpose of devolution is to give the power of decision making to another tier of government within the sovereignty of this Parliament and the unity of the United Kingdom. Therefore, we have to countenance the possibility that, on occasions, the Scottish Parliament will give certain issues different priorities. There are two ground rules to enabling that partnership to develop.
First, when we or the Scottish Parliament take decisions, we must have regard not only to the direct interests of our constituents, but to the wider implications. Secondly, when either Parliament allocates resources to one area, it has honestly to tell people from which area it plans to take those resources and to answer for that to its electorate.

Dr. Fox: I am extremely grateful to the Secretary of State for the first reasonably thought-out response to the implications of devolution that we have heard in the House for some time. Does he agree that the fiasco over the Liberal Democrats' position on tuition fees in Scotland exposes what an absolute sham the whole concept of proportional representation is? Is there not a lesson in that for the House to bear in mind when we are engaged in discussing issues with those who are in the bargain basement of principles and who will give up any promise whatsoever for the mere sniff of the inside of a ministerial Mondeo? Does he further agree that when politicians decide policies after an election, rather than people being able to vote on them, it is unhealthy for a democratic system? Perhaps the Secretary of State will take this opportunity to tell his colleagues on the Back Benches what effect what happens in Scotland will have on policies here at Westminster.

Dr. Reid: Proportional representation was deemed to be suitable in Scotland because it was the form of electoral system that was judged best to meet the consensual discussions that were taking place in Scotland. It is no more complicated than that. The hon. Gentleman is a bit churlish about the constructive way in which the parties in the Scottish Parliament have dealt with issues, given the arithmetic that was thrown up by proportional representation. When the arithmetic suggested an overall majority, two parties—the Labour party and the Liberal Democrat party—faced up to that problem, discussed it, engaged in dialogue, reached a compromise and came up

with a solution. When the problem of tuition fees came up, they discussed it, engaged in dialogue, reached a compromise and came up with a solution.
The hon. Gentleman misunderstands the feeling of the Scottish people, who often ask why politicians cannot work together. Surprisingly, he and the Leader of the Scottish National party, with their cries of no compromise, betrayal, no surrender and no discussions, display an attitude that is nearer old Westminster and old, ultra-left Labour than the new politics of Scotland.

Scientific Research

Dr. Ian Gibson: What plans he has to distribute and control funds for scientific research within Scotland. [84127]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): The Scottish Office controls a block of research-related spending of around £250 million in total. This underpins the science base in Scotland and covers the full range of the responsibilities of the Scottish Office. The Scottish Parliament will assume devolved responsibility for all these matters on 1 July.
At the same time, the UK research councils also fund research projects in Scotland. Research council funding is a reserved matter.

Dr. Gibson: Will my hon. Friend join me in congratulating medical scientists at the university of Dundee, who are developing radical cancer therapies and have launched a £4 million appeal? Does he agree that with talent like that, they can well compete for research grants on the international scene as well as for those from UK research councils and their charities? There is no need for breakaway funding councils; they can compete across the world.

Mr. Macdonald: I agree completely with my hon. Friend. Some Scottish Office research funding for the health service in Scotland, for example, goes to successful bidders throughout the United Kingdom. It is important to maintain those connections.

Miss Anne McIntosh: Will the Minister assure us that funding will continue for the research centre in Edinburgh that was responsible for much of the research that linked bovine spongiform encephalopathy to Creutzfeldt-Jakob disease? Who will be responsible for funding that centre? Will it be funded nationally or from Scotland?

Mr. Macdonald: I am not sure whether that research institute is funded through the Scottish Office or through UK funding. If the funding comes from the Scottish Office, it will be a matter for the Scottish Parliament. If it is UK research council funding, it will continue as at present.

Mr. Jimmy Hood: Will my hon. Friend outline the steps that the Government are taking to allay public concerns about genetically modified crops?

Mr. Macdonald: Some £2 million of Scottish Office research funding goes into GM-related research. That research is important to gain the necessary knowledge to assess the future of GM crops and foods.

Mr. Malcolm Bruce: On behalf of the Liberal Democrats, I welcome the whole of the renewed


Scottish Office team to the Front Bench. I appreciate the constructive way in which they seem to be engaging in the new politics. [Interruption.] That constructive spirit is being well supported on the ground by people who understand the need for stability and continuity.
Will the Minister ensure, in his role as a UK Minister, that the excellent research facilities in Scotland—particularly in the north-east of Scotland, at organisations such as the Rowett institute, the Macaulay institute and universities—secure continued funding through the Scottish Parliament? Will he also support our excellent universities as they seek the UK and international funding for which they have earned a reputation throughout the world?

Mr. Macdonald: First, I have always been a UK Minister, because the Scottish Office has always been part of the UK Government. The hon. Gentleman makes an important point. Scottish research institutes should be able to continue to bid for funding from around the United Kingdom.

Closed Circuit Television

Mr. Brian H. Donohoe: If he will make a statement on the Government's policy on CCTV as a method of crime prevention. [84128]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): The Government are firmly committed to strong policies on law and order. That is why we support CCTV as a method of crime prevention, as is demonstrated by our commitment to the Scottish Office CCTV challenge competition, which has awarded £6.8 million to more than 100 projects in Scotland since 1996. From 1 July, that will be a matter for the Scottish Parliament.

Mr. Donohoe: I thank my hon. Friend for that answer. He will know of my interest in the subject, because Irvine and Kilwinning in my constituency are without CCTV. I wrote to my hon. Friend the Member for Central Fife (Mr. McLeish), who was then the relevant Minister, and received a reply at the end of last month suggesting that there would be a new competition for an additional £13 million. When will that begin?

Mr. Macdonald: I know that my hon. Friend has been lobbying on the issue for some time. He lobbied successfully for funding for Ardrossan, Saltcoats and Stevenson. The next round of funding will be in July or August, and will be a matter for the Scottish Parliament.

Mr. Peter Viggers: Do the Government think that there is a connection between the reduction in the number of police officers in Scotland in the past year and the 13 per cent. growth in crime?

Mr. Macdonald: I know that CCTV has resulted in a 20 per cent. reduction in crime figures in some areas. It is not a substitute for good, modern policing, but the two must go hand in hand.

Ministerial Responsibilities

Sir Teddy Taylor: If he will publish a document listing his responsibilities following the establishment of the Scottish Executive. [84129]

Miss Julie Kirkbride: If he will make a statement on the future role of the Secretary of State for Scotland. [84138]

The Secretary of State for Scotland (Dr. John Reid): As Secretary of State, I will continue to have the role of representing Scottish interests across the range of matters that are reserved to the United Kingdom Parliament, as well as easing and assisting in relationships between the British Government and the Scottish Executive and between the two Parliaments.

Sir Teddy Taylor: While I wish the Secretary of State well, are we not in danger of creating a costly constitutional nonsense by retaining a group of Scottish Ministers who will be little more than Muppets sitting on the Front Bench, with no power to influence decision making in Scotland? If he doubts that, as he will no doubt tell me he does, would he care to consider Question Time today—before 1 July—when he will be asked what visits he plans and what his opinions are on social inclusion and biotechnology? Will the change not make a nonsense of the House of Commons? Why should we spend all the money on keeping a Scottish Office when its powers have gone?

Dr. Reid: I do not whom the hon. Gentleman meant by his reference to Muppets—we are not a bad team, with three PhDs and a millionaire. People in Scotland are capable of deciding who is and is not a Muppet, as they did in Cathcart in 1979. I assure the hon. Gentleman that the people of Scotland wish to be Scottish and British, they wish to take more of their own decisions in the Scottish Parliament, and they wish to play a full part in a partnership with English, Welsh and Northern Ireland representatives in the United Kingdom. In so doing, they send Members of Parliament here who have been and will be active in defending and representing the interests of the people of Scotland at every level and across the range of important issues—which he deems unimportant to them—such as pensions, benefits and welfare, economic and industrial policy, and foreign affairs and defence. I should have thought that that was a full-time job.

Miss Kirkbride: Now that we have devolution, will the Secretary of State give a proper answer to the so-called West Lothian question which is greatly exercising my constituents in Bromsgrove and those in many other English seats? In particular, will he explain why it is right or fair that the right hon. Member for Airdrie and Shotts (Mrs. Liddell) should be the Minister for Transport, with responsibility for roads in my constituency, but this House has no responsibility for roads in Scotland? Why is it right or fair that his hon. Friends who sit for Scottish seats can vote on health and education issues that affect my constituency, while English Members cannot vote on those issues in Scotland?

Dr. Reid: I am sure that they speak of little else but the West Lothian question in the pubs of Bromsgrove. I must remember not to go for a good night out in a Bromsgrove pub.
The hon. Lady seems to assume that the process of devolution stopped at the Scottish border. It did not. The process of devolution and decentralisation is of benefit and applicable to the whole of the United Kingdom. It is already taking place in Wales; we are discussing it in Northern Ireland; and we are devolving power to London. As that process unfolds, and we decentralise the basis of decision making, we will of course consider the structures at the top that were built on the old system. We are committed to bringing decision making closer to people in the United Kingdom, be they in Scotland, Wales or Northern Ireland, or, indeed, in England.

Dr. Norman A. Godman: I offer my sincere compliments to my right hon. Friend. What authority has he over matters relating to the management of traditional Scottish inshore fishing grounds? The recent transfer of jurisdictional control over several thousand square miles of traditional Scottish fishing grounds to English courts has caused deep concern among fishermen. Should not the Scottish Fishermen's Federation have been consulted on that matter?

Dr. Reid: I thank my hon. Friend for his compliments. First, as he will understand, there was previously no legal boundary line but an administrative one. Secondly, the line that has been set allows something like—I speak from memory—140,000 square miles of sea for Scottish fishing. That line has been set according to the internationally agreed legal standards and determined by the two adjacent land points. Fishermen on the western side of Scotland seem prepared to accept that international standard, although those on the eastern side do not.
I am aware of the concerns, which have been communicated by letter to my Ministers. I shall listen carefully to what fishermen have to say.

Mr. Tam Dalyell: It will be within your recollection, Madam Speaker, that you had some strong words to say on the matter of the sub judice rules in connection with Lockerbie. Will my right hon. Friend say whether the person with the relevant responsibility—either the Advocate-General or the Lord Advocate—is addressing the question of how The Sunday Times came to run a coach and horses through the sub judice rules on its front page last Sunday? Is any action being taken?

Dr. Reid: I thank my hon. Friend for the notice that he gave me about that question, which he did as I walked through the door into the Chamber this afternoon. I can tell him that my understanding of the matter, which is much fuller than it was before I entered the Chamber, is that it has been the subject of discussions between the Attorney-General and other parties, but that so far it has not involved Scottish Law Officers. However, in the near future I shall discuss the matter with my hon. and learned Friend the Member for Edinburgh, Pentlands (Dr. Clark), who is Advocate-General for Scotland and on the Bench beside me today. I shall then write to my hon. Friend with further details.

Dr. Liam Fox: The Secretary of State should be aware that his response to my hon. Friend the Member for Bromsgrove (Miss Kirkbride) about the breaking-up of England and the imposition of its balkanisation on an unwelcoming English public is likely

only to make the West Lothian question talked about in Bromsgrove. However, will the Secretary of State say whether there are any reserved powers affecting Scotland that are not covered by the responsibilities of another Secretary of State in the Cabinet? The right hon. Gentleman gave a description of his role earlier, but is his primary role to be the Scottish representative in the Cabinet, or is it to be the Cabinet's representative in Scotland? In other words, will he be the messenger boy taking messages from the Prime Minister to the First Minister, or vice versa?

Dr. Reid: On the first question, there are a number of residual powers that are not under the control of other Departments. I shall write to the hon. Gentleman with a list, which he can read in due course. On the second question, I know that the hon. Gentleman has difficulty holding two ideas in his head at the same time, but it is possible to be both Scottish and British. Indeed, the Scottish people have lived with those two ideas for some 300 years, as even a cursory glance at Scottish history would reveal.
I am therefore both a representative of the Scottish people in the British Cabinet, and a representative of the British Cabinet in Scotland and throughout the United Kingdom. I have no difficulty at all in reconciling both roles, and I do not think that the hon. Gentleman should worry about my capacity to do both jobs at the same time.

European Legislation

Ms Rachel Squire: If he will make a statement on the arrangements for joint scrutiny with the Scottish Executive of European legislation. [84130]

The Secretary of State for Scotland (Dr. John Reid): On this occasion I shall refer to my book. Detailed arrangements for the scrutiny of European legislation in the Scottish Parliament will be a matter for members of its European Committee. Liaison between that Committee and the European scrutiny Committees will be a matter for members of those Committees. Scottish Ministers will play their part in fully developing the agreed UK line.

Ms Squire: I, too, begin by congratulating my right hon. Friend on becoming Secretary of State for Scotland. Does he agree that, although the European Union has brought considerable financial and other benefits to Scotland, both to remote rural areas and to areas that have experienced heavy job losses in traditional manufacturing and other industries, it is still seen as unaccountable and distant from people's everyday lives? Does he therefore agree that the Scottish Parliament and the UK Parliament can take the lead in bringing Europe closer to the people by working together, developing effective joint scrutiny of European legislation and, through such a partnership, delivering the best possible deal for the people whom we jointly represent?

Dr. Reid: I agree with my hon. Friend on both points. We need a strong voice in Europe, and that is provided by the Labour Government. We aim to see Scotland leading in Britain and Europe, not leaving Britain or Europe. Our voice should certainly be directed partly towards making the EU, its instruments and the vehicles


of its policy more directly relevant to ordinary families in rural and other areas throughout Scotland. The achievement of a strong voice in Europe, to make the EU more relevant, to reform it and to bring it more directly to people's interests, is the reason that every vote in the European election should be cast for the Scottish Labour party.

Sir Robert Smith: When considering implementation of European legislation, will the Secretary of State consider the concerns of the hon. Member for Greenock and Inverclyde (Dr. Godman) and meet the Scottish Fishermen's Federation to discuss its concerns that past implementation has set precedents of which the Committees that agreed the orders were not aware and which could influence decisions on future implementation?

Dr. Reid: As I said to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman), I shall carefully consider any representation that I receive from Mr. Morrison and the Scottish Fishermen's Federation. I have explained the basis on which the decision was taken, but, if any representation is made, I shall consider it.

Mrs. Rosemary McKenna: I welcome all the new members of the Front-Bench team to their posts. On a European note, may I suggest that Scots are good Scots, good Britons and good Europeans? Will my right hon. Friend join me in sending our best wishes to our fellow Scot Alex Ferguson and his Manchester United squad who will attempt to bring the European champions cup to Britain tomorrow?

Dr. Reid: I have no hesitation in agreeing with every word that my hon. Friend said. Alex Ferguson is an example to us all of how to lead in Britain and in Europe. That is precisely what the Labour Government aim to do, and that is another reason for voting Labour in the European elections. We send heartfelt support to Manchester United, and I hope to see the European cup come back to Britain.

Mr. Oliver Letwin: May I add to the congratulations that many hon. Members have offered to the Secretary of State, not least because of the quite admirable way in which he has dealt with his first, positively surreal Scottish Question Time? In the light of his remarkable and self-proclaimed ability to do two things at once, whose part would the Secretary of State take if a piece of European legislation meant that the interests of Scotland conflicted with those of the whole United Kingdom?

Dr. Reid: It is clear that United Kingdom Ministers will lead on issues in Europe. It is equally clear, however, that the Scottish Parliament and its representatives will be fully involved in formulating the UK policy on any representation to Europe. It may be some time since the hon. Gentleman was in Government; I cannot recall whether he ever was.

Mr. Letwin: indicated dissent.

Dr. Reid: He modestly indicates that he was not. When, at some distant stage in the future, the hon.

Gentleman does enter Government, he will find that the reconciliation of differences such as the one that he has raised are an everyday occurrence.

Modern Apprenticeships

Mr. Michael Connarty: How many modern apprenticeships places will be made available in Scotland; and if he will make a statement on the timetable and cost of the initiative. [84132]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): A well-trained work force are the foundation of a modern economy and that is why the Government set a target of 15,000 modern apprenticeships by 2002. From 1 July 1999, this will be a matter for the Scottish Parliament. The Labour party campaigned in the recent Scottish election on a commitment to increase that figure to 20,000—a doubling of the present figure. The budget for this financial year is £17 million.

Mr. Connarty: I thank my hon. Friend for that reply. As I represent an area with a heavy petrochemical industry, I have already come across young people in Grangemouth and the surrounding towns who have taken up modern apprenticeships in the chemical industry. May I reassure my hon. Friend that they are pleased that they have a Government team at Scottish and at United Kingdom level who are willing to invest in their future? Will he reassure those young people that this Government, and Scottish Ministers working in co-operation with UK Ministers, will maintain a steady course and a stable and strong economy so that they can be sure that they will have jobs for which to compete in a growing economy in Scotland?

Mr. Macdonald: I can certainly give my hon. Friend that assurance. He is right to say that the wider UK context of a strong economy is essential to deliver the goal of more apprenticeships which the new Scottish Parliament will try to achieve. There are around 1,500 modern apprenticeships in engineering, which I am sure will be welcome news to my hon. Friend given his constituency interests.

Mr. Archy Kirkwood: Will the Minister assure the House that the south-east Scotland and Scottish borders area will have its fair share of access to those new modern apprenticeships? Will he acknowledge the importance, in particular in such industries as textiles, of training, so that the industry can be promoted in the best possible way? Will he also acknowledge the importance of European Union structural funds to training, in addition to modern apprenticeships? When will he be in a position to announce the results as regards eligibility for European structural funds and the new regional selective assistance maps for areas such as south-east Scotland? In making those decisions, will he take into account the economic difficulties that that region is facing?

Mr. Macdonald: On the latter point, the hon. Gentleman will be aware that there is a consultation period as regards the map. We will wait until the end of that period to find out what feedback we get before any


final decisions are taken. On modem apprenticeships and the textile industry, a number of industries are not as well-represented as they should be in the scheme. In the coming months, we will try to improve their profile, including that of the textile industry.

Mrs. Maria Fyfe: May I add my congratulations to the new Front-Bench team and ask my hon. Friend whether every effort will be made to ensure that as many of the apprenticeships as possible come to Glasgow? He will be well aware that the loss of jobs in Glasgow is not a recent event—it has been occurring for decades, and during the period in office of the previous Government many large businesses became small businesses or went out of business altogether. If we can create opportunities, I hope that something can be done for the young people of Glasgow.

Mr. Macdonald: My hon. Friend is right. I cannot give her the figures for the number of apprenticeships in Glasgow, but if we are to get young people back into employment, we need good skills and training, which is what the modem apprenticeships scheme is designed to achieve.

Tuition Fees

Mr. Desmond Swayne: If he will make a statement about his plans for university tuition fees in Scotland. [84133]

The Secretary of State for Scotland (Dr. John Reid): I refer the hon Member to the answer that I gave to the hon. Member for Lichfield (Mr. Fabricant) a few moments ago.

Mr. Swayne: No, I asked the Secretary of State about his plan—his own plan—for tertiary education. He told my hon. Friend the Member for Lichfield (Mr. Fabricant) the plan for the Scottish Parliament. The Secretary of State still has more than a month in which to implement any plans that he may have. The right hon. Gentleman will be aware that, this academic year, students in Scotland will pay about £19 million in fees, but only £4 million will go to the institutions as additional funding. What did the Prime Minister mean when he said before the election that he had no intention of introducing such fees? Was it merely rhetoric—much like the rhetoric of the hon. and learned Member for Orkney and Shetland (Mr. Wallace)?

Dr. Reid: In the first place, I think that I answered the hon. Gentleman's question by saying that our plans had been outlined in July 1997. If he checks Hansard he will see that that was my answer before I referred to the Scottish Parliament's decision. I think that the gist of the hon. Gentleman's question is, "Are our plans good plans?" I think that they are not only good but fair. Most people would accept that, if we are trying to fund a fairly massive extension of entry to higher education, it is fair and reasonable to say that those on the average income or below will make no contribution towards fees—more than 50 per cent. of the recent intake were in that position. Those who are on slightly above average income should make some contribution and those who are on an income of £28,000 a year should pay the full amount, which is a maximum total of £1,000.
Those are reasonable plans that reflect not only the need for us all collectively to provide for the least privileged, but the increased earning capacity of those who have the benefit of education at universities or at higher level. The plans were and are reasonable. If the Scottish Parliament should decide that it has priorities in another direction or wishes to make a decision in a different fashion, that is a devolved power that it has. I am sure that in this country we can live with the reflection of local needs and priorities in a fashion that does not need the synthetic rage that the hon. Gentleman managed to conjure up.

Mr. Michael Moore: I add my congratulations to the Secretary of State on his new position and wish him every success. He is clearly enjoying it so far. Does he agree that the essence of devolution is that political problems and issues can have different solutions in different parts of the United Kingdom? Are not tuition fees a particularly good example of an instance where Scotland can have a different policy from the rest of the United Kingdom?

Dr. Reid: I thank the hon. Gentleman for his comments. On the question of enjoying it, it has been all right so far, but we have not gone a long way yet. His general proposition, that the essence of devolution is that we have to countenance the fact that people will make their own decisions within the areas prescribed to them, is correct. That is why I said in my first answer that I genuinely believe that the unity of the United Kingdom will be strengthened by a recognition of our diversity within these islands.
However, with rights go responsibilities for all of us. Whether in this Parliament, the Scottish Parliament or local councils, if people wish to put more money and resources towards a given priority, they have the obligation to explain to their constituents where they are taking the money from and why something else has been deprioritised. That applies to all of us. Provided that we all do that, and work with good will and partnership, I think that devolution in Scotland, and decentralisation throughout the United Kingdom, will be a great boon to the unity of this United Kingdom.

Genetically Modified Crops

Mr. Norman Baker: What responsibilities in respect of genetically modified crops will be transferred to the Scottish Parliament. [84134]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): Genetically modified crops are a devolved matter, so the Scottish Parliament will have competence to legislate in that area, within the parameters laid down in European Union legislation.

Mr. Baker: I am grateful for that answer. Will the Scottish Parliament be able to invoke article 16 of the 1990 EU directive 90/220 and ban the growing of Novartis maize, which the Minister will know has been banned in Austria and Luxembourg? If he cannot answer now, will he write to me? Will the Scottish Parliament be


able to stand up for the consumer, the farmer and the environmentalist in a way that the Minister for the Cabinet Office conspicuously failed to do last week?

Mr. Macdonald: I do not know about the specific crop that the hon. Gentleman mentioned or the situation in Austria or Luxembourg but a general moratorium on genetically modified crops is not legal under EU law, as I am sure that he realises. The important thing is to conduct trials responsibly. That is why the Government have a number of agencies at our disposal to provide advice, including the Advisory Committee on Releases to the Environment and the Advisory Committee on Novel Foods and Processes. Last Friday, two new commissions were set up: the Human Genetics Commission and the Agriculture and Environment Biotechnology Commission. The important thing is to ensure that the Scottish Parliament can get advice from those commissions operating on a UK-wide basis. That is what we intend.

Mr. Edward Leigh: Apart from genetically modified crops, which issues likely to excite political interest are to be left to the Scottish Office and not covered by another United Kingdom Minister?

Mr. Macdonald: I think that the hon. Gentleman is repeating earlier questions. My right hon. Friend the Secretary of State gave the answer to all those questions; he operates—indeed the Scottish Office operates—both as a representative of the Scottish people within the British Cabinet and as a representative of the British Cabinet in Scotland and throughout the United Kingdom.

LORD CHANCELLOR'S DEPARTMENT

The Parliamentary Secretary was asked—

Immigration Adjudicators

Fiona Mactaggart: Pursuant to his answer of 23 March 1999, Official Report, column 133, on immigration adjudicators, by what percentage the number of outstanding immigration appeals has been reduced; and what training has been undertaken by immigration adjudicators. [84157]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): Between the end of December and the end of April 1999, the total number of outstanding appeals to adjudicators fell by 54 per cent. Any case can now be heard within four weeks of receipt. There is an on-going training programme for new adjudicators and three dedicated training days have been held this year on recent developments in immigration law.

Fiona Mactaggart: I thank my hon. Friend for that reply—and may I be the first to congratulate him on his new responsibilities? As his answer reveals, there is some spare capacity caused by relatively slow processing of domestic immigration cases and statements by the Home Office. As he has shown in the past—for example, in the Adjournment debate that he secured in January this year—there is concern about the operation of entry clearance overseas. Would it be possible for him to take steps to ensure that a larger proportion than the current

17 per cent. of work done by adjudicators relates to people appealing against the decisions of entry clearance officers overseas? In my constituency, there are people who have waited for more than six months merely to have an interview. To have to wait longer thereafter for an appeal is unfair. My hon. Friend is faced with a great opportunity to speed up the process radically. Will he take it?

Mr. Vaz: I thank my hon. Friend for her kind comments. May I take the opportunity to acknowledge the dedicated and distinguished way in which my predecessor, my hon. Friend the Member for Ashfield (Mr. Hoon), now the Minister of State, Foreign and Commonwealth Office, held this post? I am sure that the whole House wishes him well in his new career.
It did not take my hon. Friend the Member for Slough (Fiona Mactaggart) long to remind me of what I said in January. The reduction in the number of outstanding cases has been remarkable. As I have been in the job for only seven days, I cannot take credit for that extraordinary achievement. My hon. Friend is aware that the issue of entry clearance officers and the way in which explanatory statements are issued by the posts abroad are matters for the Foreign Office. She is also aware that there are plans to improve that service by initiating pilot schemes—possibly even ensuring that some of the interviews are recorded. As for the Lord Chancellor's Department, we shall work with the Foreign Office and the Home Office, which has responsibility for dealing with such matters in this country, to ensure that the system is the best for the people who have applied and who have appealed. We shall ensure that the system is efficient, fair and quick.

Mr. Edward Gamier: I join the hon. Member for Slough (Fiona Mactaggart) in congratulating my constituency neighbour on his promotion to the Lord Chancellor's Department as its Parliamentary Secretary. I trust that he will enjoy working with the Lord Chancellor as much as the hon. Member for Ashfield (Mr. Hoon) so clearly did.
Will the Minister tell the House why he thinks that the former Minister's reply, set out as a written answer at column 133 of Hansard of 23 March, is a proper and connected answer to the question asked at that time by the hon. Member for Slough?

Mr. Vaz: I thank the hon. and learned Gentleman for his kind comments. Clearly, Market Harborough and Leicester, East will often be together in the Chamber during the months to come.
Of course the answer is connected. My hon. Friend the Member for Slough asked whether the number of delays had improved. It has improved; the number of cases has gone down. In the last year of the previous Government, there were 34,000 outstanding appeals. Today, there are 7,113 outstanding appeals. That is a dramatic reduction. That is because the system works and because of the need to ensure that those cases are dealt with as quickly and as speedily as possible.

Magistrates

Dr. Tony Wright: What plans he has to review the retirement age for magistrates. [84158]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): The Lord Chancellor has no plans to review the retirement age for magistrates, which is 70 years of age, and broadly the same as for all holders of judicial office. The Lord Chancellor recognises the important contribution that older people can make and, for that reason, increased the upper age limit for appointment to 65 in 1997.

Dr. Tony Wright: I add my voice to the general congratulations offered to my hon. Friend.
I applaud the Lord Chancellor for moving the appointment age of magistrates from 55 to 65 two years ago, but does he not now need to take the next logical step and shift the retirement age? It surely makes no sense to recruit good, active people in their sixties if they are then forced to retire from the bench at 70. Having done one good thing, it is now time to do another.

Mr. Vaz: I thank my hon. Friend for his support for the Lord Chancellor's decision. As he knows, the retirement age of 70 for lay magistrates was approved by Parliament in 1968. The Lord Chancellor values the contribution that older people have made to the bench, but it is right that the bench should be as representative as possible of society as a whole. That is why the Lord Chancellor feels that the retirement age of 70 is appropriate, and it means that many people serve beyond the normal retirement age. A recent campaign to recruit more magistrates resulted in 14,000 inquiries. I think the whole House wants to see a bench that is truly representative of society. That is why we believe it is appropriate to keep the retirement age at 70.

Mr. Robert Maclennan: Does the Minister acknowledge that 30 years is a long time in politics and that it is not too soon to review the retirement age as the hon. Member for Cannock Chase (Dr. Wright) suggests? Many people over the age of 70 can continue to give good judicial service. They should leave the bench not because of their age but because they wish to do so or because of their evident unsuitability.

Mr. Vaz: The right hon. Gentleman knows that it is important to have an age limit, otherwise there is a risk that people will go on for ever—and that would not be appropriate. It is important to attract more young people into the magistracy. The Lord Chancellor normally appoints people aged over 27 and the age, ethnic and gender profiles have changed enormously in the past two years. I take the right hon. Gentlemen's point—it is a serious one—but I am sure he will agree that it is important that the bench should represent and reflect society.

Judges Council

Mr. Andrew Dismore: If he will take steps to make the Judges Council publicly accountable. [84160]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): The Judges Council is wholly independent of Government. It is an informal

judicial body that represents and supports the senior judiciary in the exercise of their constitutional functions. The independence of the judiciary must be respected.

Mr. Dismore: I join hon. Members in congratulating my hon. Friend on his promotion.
Does he agree with the assessment provided by the Library?
The Council has no formal constitution, and as a collegiate body of judges who are themselves individually answerable to nobody, is formally answerable to no-one apart from those it represents. It meets six times a year, but its minutes are not published.
Bearing in mind the council's very important public functions—for example, making decisions about the outside interests of judges—does my hon. Friend agree that it is about time that, instead of allowing it to behave like a branch of MI5, we took a leaf out of the freedom of information book and put the Judges Council on a statutory footing?

Mr. Vaz: I thank my hon. Friend for his kind comments. I congratulate him on the fact that his remarks about judges in the Committee stage of the Access to Justice Bill have been selected as the quote of the week in the latest edition of The Lawyer magazine. The Judges Council is an independent body. It is quite right that the senior judiciary should feel that they can meet to discuss issues of concern, and it is also right that they should pass that advice to junior members of the judiciary. The Judges Council has not issued any instructions to anybody: it has merely given guidance. It is right that a body of this kind comprising senior judges should be able to do so.
I am not sure why my hon. Friend feels so strongly about judges. I hope to take some time off while in this job to introduce my hon. Friend to several judges. He will find that they are friendly people of enormous integrity—and some of them may even live in Hendon.

Crime and Disorder Partnerships

Ms Hazel Blears: What role magistrates will play in the local partnerships established under the Crime and Disorder Act 1998. [84161]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): The magistrates courts committees will be consulted on issues that affect the work of the courts and invited to participate in partnerships established under the Crime and Disorder Act. Magistrates have a good understanding of local crime and disorder problems and will be able to provide valuable insights into those issues. It is important to keep open channels of communication if local partnerships are to be effective.

Ms Blears: I welcome my hon. Friend to his new position, and I hope to explore with him his views about locally administered justice. Magistrates are clearly crucial to crime and disorder partnerships, particularly in implementing anti-social behaviour orders and administering new community-based punishments. It is important that local magistrates benches should administer justice locally from the magistrates courts. In Salford, the bench is very involved in the partnership and


administers justice locally. Does my hon. Friend agree that justice is best administered locally, within the community that the magistrates represent?

Mr. Vaz: My hon. Friend is absolutely right. I know of her interest in this matter and that, last year, she met the chairman of the Salford advisory committee to discuss how to increase the number of local magistrates and to broaden the nature of the bench. Those issues concern magistrates and magistrates courts committees. Although magistrates ought to be involved in those aspects of policy, it is important also that they are independent; they should not be involved in managing local strategies and they should never discuss individual cases. As long as those parameters are clear, we should support their role in ensuring that partnerships are successful.

Mr. Christopher Gill: Further to the hon. Lady's question, is the Minister aware of the serious concern expressed by magistrates in Shropshire about the prospect of the closure of custody units at police stations in market towns in the county? Will he take this opportunity to tell my constituents that he believes that it is important to retain the full range of services at police stations that serve local magistrates courts in market towns throughout Shropshire?

Mr. Vaz: Of course it is important that the full range of services is available, but clearly, in this case, local circumstances must be taken into account. If the hon. Gentleman feels strongly about the matter?this is the first time that he has brought it to my attention—and would like to discuss it with me, I will be happy to meet him and discuss it further.

Legal Aid (Coroners Courts)

Mr. Colin Breed: What plans he has for the provision of legal aid for representation at coroners courts. [84163]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): The Government do not intend to extend the scope of legal aid to provide representation at coroners courts in most cases. Unlike most court proceedings, coroners inquests are inquisitorial. Providing publicly funded representation at inquests and inquiries should not be a priority for taxpayers' money. However, the Access to Justice Bill contains a provision to enable the Legal Services Commission to fund representation when exceptional circumstances warrant it.

Mr. Breed: I thank the Minister for his response—and Liberal Democrat Members, too, congratulate him on his new appointment. He will be aware of the tragic circumstances of one of my constituents, an 18-year-old girl who died last year in unexplained circumstances. Her mother would have found it extremely helpful to get professional advice and support to represent her views and

those of others at the coroners court. The lack of such representation has led to further complications and disputes.
I accept the Minister's point about the Access to Justice Bill, but there is a small number of cases in which legal aid would not only assist the families but help to achieve justice.

Mr. Vaz: I thank the hon. Gentleman for his kind comments. The whole House feels for the family of Miss Andrews. I hope that he will pass on to her family my sympathy, as a parent, about the tragic circumstances of her case.
It is important that we prioritise legal aid money and that taxpayers' money should be directed to specific areas. There are exceptional circumstances in which advice and assistance can be given, but not in the cases referred to by the hon. Gentleman. I know that he has worked very hard on the case of Miss Andrews, and it is through his intervention that many of the agencies have opened up and provided her family with access to information. I thank him for that, and I will be happy to meet him and his constituent, Mrs. Andrews, if he thinks that such a meeting would be appropriate, provided that the discussion is not about legal aid. If the hon. Gentleman has found that there are problems in the workings of the system, I will be happy to meet him and discuss them.

County Courts (Staffordshire)

Mr. Michael Fabricant: If he will make a statement regarding the location of county courts in Staffordshire. [84164]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): There are five county courts in Staffordshire: Burton-upon-Trent, Stafford, Stoke-on-Trent, Tamworth and Lichfield.

Mr. Fabricant: May I say how pleased I am to see the hon. Gentleman in his position—in my view, it is two years overdue? He knows from our correspondence over the past few days that the future of the Lichfield county court is at risk. Does he agree that there is a role for a partnership between magistrates courts and county courts, if they can save costs by sharing the same buildings?

Mr. Vaz: I thank the hon. Gentleman for his kind comments. I shall miss him in the lifts at Norman Shaw North. One of the first letters that I received, inherited from my predecessor, was his letter. With his silver tongue, as he demonstrated today, he obviously persuaded my predecessor of the need to defer the closure of the court. He has an absolute assurance from me that nothing will happen until the three-month period is over. I know that he has ensured that there will be a meeting on 28 May, and I congratulate him on convening it. I await with great interest the outcome of that meeting, which will keep me informed. I shall then let the hon. Gentleman know my final decision.

Anti-Drugs Strategy

The Minister for the Cabinet Office (Dr. Jack Cunningham): With permission, Madam Speaker, I should like to make a statement about the Government's anti-drugs strategy.
I am pleased to lay before the House today the United Kingdom anti-drugs co-ordinator's first annual report and plan. No one in the House needs to be reminded of the importance of our fight against drugs. Quite apart from the devastating effect that drugs can have on users, their families and their friends, they have serious implications for all of us in the wider community.
Illegal drugs, particularly heroin and cocaine, are a major cause of crime. A heroin or crack cocaine addict can require an illegal income of £10,000 to £20,000 each year simply to feed his or her habit. As a result, such addicts are responsible for a substantial proportion—some 30 per cent.—of all crime, particularly theft and burglary. Those figures are too compelling to be ignored. The Government are committed to addressing the causes of crime, as well as the consequences. If we can make a positive impact on drug misuse, we can say with some confidence that we will make a positive impact on crime.
The White Paper, "Tackling Drugs to Build a Better Britain", set out our 10-year strategy for reducing the use of drugs throughout our society. The report published today describes progress during the first year of the strategy and sets targets for the short, medium and long term. I am grateful to Keith Hellawell and his deputy, Mike Trace, for the work that they have done in preparing the report.
There are some positive messages to be drawn from the report. For the first time, departments and agencies nationally and locally are being brought together to work in partnership towards joint performance targets. The focus is on results and on working together across departmental boundaries, which reflects the proposals that we laid out in the modernising government White Paper.
The proposals in the annual report and plan will help us to meet the objectives that we agreed in the public service agreement on drugs. The agreement binds all relevant Departments to work together to deliver a reduction in the proportion of people under 25 who misuse illegal drugs; a reduction in the level of reoffending by drugs-misusing offenders; an increase in the participation of problem drug misusers, including prisoners, in drug treatment programmes which have a positive impact on health and in reducing crime; and a reduction in the access to drugs for young people.
Between now and 2002, all departmental and agency resources and activities against drugs will be increasingly redirected towards those and associated targets, as set out in the national plan. Departments have been allocated an additional £217 million for targeted anti-drugs activities. Existing resources in the criminal justice system will be progressively moved from dealing with the consequences of drug-related offences to programmes that enable offenders to tackle their drug problems.
There will, however, be no let up in our determination to pursue drug dealers. My right hon. Friend the Home Secretary has introduced a seven-year minimum sentence for third time, class A drug traffickers and we will continue to give the police every support in targeting such offenders.
Drug action teams will have a crucial role in the implementation of the strategy. During the past 12 months, drug action teams undertook a comprehensive planning process, which shows that a great deal of good work is already under way. I pay tribute to much excellent work done at local level by both the public and voluntary sectors. Their contribution is essential to our success. However, we must ensure that they have the support they need to build on that work. That is why we have created the drug prevention advisory service, which will provide drug action teams with an invaluable source of advice and support.
There is a regrettable shortage of reliable information about drug use, so we are putting in place better information systems to show more definitively what the drugs problems are, what works best against them and what is cost-effective. We shall spend an extra £6 million over the next three years to help to fund a major new research programme to establish accurate baselines.
Additional support for the strategy and its objectives will be provided by partnership with the private sector and by channelling the assets seized from convicted drugs traffickers back into action against them and their crimes. I am pleased to be able to announce that £3 million will be available from that source in 1999–2000, which is to be increased in future years. The illegal gains of drug dealers will be used to tackle the problems that they generate.
In line with our commitment under the public service agreement, the national plan sets key performance targets for the medium and long term. For young people, we aim to reduce the proportion of people under 25 reporting use of illegal drugs in the past month and the previous year substantially, and to reduce the proportion of young people using the drugs which cause the greatest harm—heroin and cocaine—by 25 per cent. by 2005 and by 50 per cent. by 2008.
In our communities, we will reduce the level of repeat offending among drug misusing offenders by 25 per cent. by 2005 and by 50 per cent. by 2008. In the treatment sector, we will increase the participation of problem drug misusers, including prisoners, in drug treatment programmes, which have a positive impact on health and crime, by 66 per cent. by 2005 and by 100 per cent. by 2008.
In seeking to limit availability, our aim is to reduce access to all drugs among young people under 25 significantly, and to reduce access to the drugs that cause the greatest harm—heroin and cocaine—by 25 per cent. by 2005 and by 50 per cent. by 2008. Those medium and long-term targets link directly with the strategy's vision of shifting the emphasis from dealing with the consequences of drug misuse to prevention of that misuse. They are supported by a range of shorter-term targets for the next year and the next three years.
For example, by 2002, we propose to reduce the number of 11 to 16-year-olds who use class A drugs by 20 per cent.; during 1999–2000, we will double the number of face-to-face arrest referral schemes and the number of arrestees referred to and entering treatment programmes; during the next year, we will also establish in all prisons a comprehensive treatment framework to improve the assessment, advice and support of prisoners; and by 2002, we plan to increase by a third the amount of assets seized from drug traffickers.
The past year has been about preparing the ground for the implementation of the strategy. The new initiatives and the targets I have announced today show the way forward. I recognise that this is a difficult task, and progress will depend on commitment to the policy and careful monitoring of the outcomes. There are no easy solutions, which us why our strategy is for a 10-year programme. I believe that our targets are achievable. They will help to deliver our society from the problems created by drug misuse.

Mrs. Ann Winterton: Conservative Members welcome the publication of the first drugs annual report and action plan by the United Kingdom anti-drugs co-ordinator. I thank the Minister for allowing me to have a copy a little earlier this afternoon: I much appreciated that.
The report sets out targets for the short, medium and long term, and encourages Departments and agencies to work in partnership at both local and national level. It must be said, however, that the very sharpness of the targets in the report contrasts markedly with the lack of clarity in the baseline of the underlying problem.
The whole House remains supportive of the four objectives outlined in last year's White Paper, "Tackling Drugs to Build a Better Britain": to reduce the use of illegal drugs by young people, to protect our communities from drug-related crime, to provide effective drug treatment programmes and to stifle the availability of drugs on the streets.
The drug problem in the United Kingdom often appears intractable, and, sadly, appears to be growing. The supply of, for example, heroin and cocaine is increasing, while the street price of those and other drugs is falling. In the statement, the Government expressed their intention of focusing more on class A drugs. Will the Minister confirm, however, that they have no plans to decriminalise the use of cannabis or other class B drugs? Will he reaffirm that to take any illegal substance is plainly wrong, addictive and dangerous?
We know that young people aged between 10 and 17 are being targeted by pushers, and that the number of those taking hard drugs such as heroin and cocaine is rising. We support all steps to protect young people from those who peddle drugs—including their contemporaries—by ensuring that they have the knowledge and social skills to withstand peer pressure. Education directed at prevention is vital, and must receive the full support and involvement of parents and families. Does the Minister agree, however, that young people who are older—old enough to vote, for instance, or to leave home—having been taught the difference between right and wrong, must accept responsibility for their actions? The buck stops with each individual, and we must not make excuses for their illegal drug-taking.
We welcome the targets announced for treatment programmes, including programmes for people in prison, bearing in mind that at present there is a waiting time of approximately 15 weeks. Is the Minister confident that sufficient resources are available to deliver those ambitious targets? Will he comment on Professor Howard Parker's observation on the "Today" programme this morning that the new wave of drug-taking was unforeseen, that it would strain the Government's strategy, and that the Government might not reach some of their goals?
I recall that the drug treatment and testing orders were to be in the vanguard of the Government's policy. Does the Minister accept that take-up has been extremely poor? Only 67 orders have been made, of which 10 have been revoked, in the three pilot areas where hundreds, if not thousands, of drug cases have gone before the criminal courts. Is the Minister satisfied that the budget of £40 million for the scheme, when it is fully implemented next year, is enough, given that each order costs approximately £6,000? That means that only about 6,600 orders can be made throughout the United Kingdom.
The availability of drugs on our streets is growing. We acknowledge the Government's action in retaining 300 Customs and Excise officers, but does the Minister accept that there are continuing problems in the service, with a possible reduction of more than 1,000 jobs over the next three years, which will directly and adversely affect drug intelligence and anti-smuggling measures?
The United Kingdom has an advantage in being an island, so that drugs must arrive by sea or air, other than through the channel tunnel. That is in marked contrast to countries in mainland Europe, where border controls are noticeably absent. Customs officers are uniquely placed to detect drugs at ports, airports and around remote coastlines. Minor entry points are receiving a growing share of high-risk traffic. Why, therefore, are there to be reductions in the intelligence unit in the west country, and why is the highly successful Plymouth drug detection dog unit to be closed? Will that not have a direct impact on the growing availability of drugs on our streets?
The right hon. Gentleman asserted in his statement that there would be no abatement of efforts to pursue drug dealers. We endorse that statement wholeheartedly. At least 80 per cent. of intelligence development work is linked to drugs. Is the Minister satisfied that we have enough officers in the field overseas and enough police here to follow through that policy? Police numbers are falling, and that is a worrying trend.
In supporting the Government's objectives, I express the hope that words will be backed by deeds. The perception of people in the United Kingdom towards drugs policy is all important. They want to see effective deterrence to drug use and drug trafficking, and they want tough penalties to be imposed. They want their local communities to be cleaned up. They are looking to the House for a lead to show that there is no soft message on drugs. The war on drugs must be waged with energy, drive and commitment if we are to succeed in protecting our children from their insidious consequences.

Dr. Cunningham: I am grateful for the hon. Lady's general welcome and support, and I agree with much of what she had to say. There is a problem with baseline information, as I said in my statement and as she emphasised. The information is not available because the situation and policies that we inherited were not focused, not co-ordinated and not based on any hard information. That is the reality that we discovered, and why we have taken time and are investing £6 million of new resources in trying to improve the robustness of the baseline figures.
The hon. Lady is absolutely right that it is essential that we do that. None of that work had been done. One of the plus points of developing a new strategy in this area is that we will obtain that information. We do not have robust baselines, but we know what the trends are, and, as the


hon. Lady said, they are in the wrong direction. We have some information to go on, but I want to be clear with everyone—as I have been in the interviews that I have given—that I believe that that is not good enough, and that we need to improve the credibility of the information on which we base our plans.
We have no plans or proposals to decriminalise cannabis. The hon. Lady rightly said that the public expect us to take the toughest possible line against drug abuse and the crime related to it. Therefore, I repeat that there will be no softening of policy in this area. She is quite right to say that all drugs present dangers to young people, which is why education, advice and support is so important.
This morning, Keith Hellawell and I visited Camden girls school. I pay tribute to and thank the head teacher, Geoffrey Fallows, and his staff. We saw excellent work being done with young people in this area. That work is essential, so we have allocated an extra £217 million for that aspect, and will progressively shift resources—the £1.4 billion that we currently spend on all drugs-related issues—in the direction of education, information, advice, treatment and rehabilitation and away from dealing merely with the consequences of drug abuse and drug-related crime.
The hon. Lady referred to young people over the age of 18. With their freedoms and rights must come responsibilities; they must face the consequences of their actions. However, the policy must try to prevent them from getting into trouble with drugs in the first place.
As we know, we have some of the toughest custodial sentencing policies of any country in Europe, but we still have one of the worst records on drugs-related problems of any country in Europe. It is not that the courts do not have strong powers; it is not that we have not already strengthened those powers—it is that we are not dealing with the root cause of the problem early enough. That is the biggest single argument for the shift in policy that we are bringing about.
I am pleased that the hon. Lady welcomed the setting of targets. I know that they will be difficult to achieve—no one knows that better than me; I have been looking at the matter for a year. However, without targets and without benchmarks against which we can gauge progress—or not—we will simply remain in the dark. We will not know whether policies are working, whether we need to adjust them, or whether we need to change the allocation of resources. We are taking something of a risk. We are exposing ourselves by setting those tough targets, but we must have something to aim at and against which to gauge the success, or otherwise, of our policies.
I did hear Professor Parker this morning, and there is something in what he says. Unhappily, although seizures of illegal drugs have increased tenfold, availability on the streets has not declined. We know that heroin is available at higher quality, in greater purity and cheaper than ever before. The increasing availability of class A drugs such as heroin poses a real threat to our young people. We have to get to grips with the problem.
Of course, the drug testing and treatment orders are in the early stages—

Mr. James Clappison: They only scratch the surface.

Dr. Cunningham: That is an absurd thing to say. They have only been introduced relatively recently.

Mr. Clappison: Seven months.

Dr. Cunningham: Seven months, the hon. Gentleman says. How long does the drugs problem in this country go back? What was his party doing for 18 years. We are deliberately piloting the orders so that we can gauge their effectiveness, or lack of it. If they are shown not to be an efficient use of resources, we will have to make changes. The hon. Gentleman's comment demonstrates a complete lack of understanding of the nature of the problem and how we are trying to deal with it.
It would be unusual if there were not some major difference of opinion on such a statement between the Government and those on the Opposition Front Bench. I again pay tribute to the hon. Member for Congleton (Mrs. Winterton) for her measured response. However, when she said what she did about Customs officers, I parted company from her because it was her Government and her party that supported a reduction of 500 Customs officers and planned a further reduction of 300. It was only this Government, on election in May 1997, who prevented that further reduction. As a result of the comprehensive spending review, my right hon. Friend the Chancellor gave more resources for use in the sector.
As the hon. Lady knows, increasingly the interception of drugs is intelligence led; it is not a matter simply of the number of people on the ground any more. She was right to say that we need to work hard with our partners in Europe and in the United Nations, as we are doing first, to improve our intelligence and understanding of the cartels, and secondly, to eliminate at source the growth in production of drugs.
With that one difference of opinion with the hon. Lady, I again welcome warmly what she had to say about the policy.

Several hon. Members: rose—

Madam Speaker: Order. That initial exchange took 25 minutes. I hope that we might now proceed in a much more brisk fashion.

Mr. Chris Mullin: I welcome my right hon. Friend's statement as clear evidence that the Government are taking very seriously this very serious and debilitating problem, and that they are putting their money where their mouth is. I particularly welcome the proposal to spend about £60 million in prisons, where—as we have a captive audience—there is a window of opportunity to deal with a very serious problem.
May I ask for my right hon. Friend's assurance that all outcomes will be properly monitored? In the past, in relation to community sentences and the Probation Service, one thing that we have discovered is that, of the several hundred schemes in existence, only a handful were


able to produce sufficiently rigorous figures for us to make any serious judgment on outcomes—which, given the rigorous targets that he has set, will be essential.

Dr. Cunningham: I am grateful to my hon. Friend. I am not so sure about windows of opportunity in prisons, but I agree that we need rigorously to examine all the programmes and schemes to determine first, whether they are working and delivering the outcomes that we want; and secondly, whether we are getting value for money from the schemes. If not, we shall have to change them.

Mr. A. J. Beith: Is the Minister aware that we strongly support the work that Keith Hellawell is doing, and the work that others are doing in co-ordination with him? However, does the right hon. Gentleman realise that the targets—which he has called difficult—even if achieved, pre-suppose a continuing very large drug problem in the United Kingdom? Is he aware that we want to encourage much wider use of drug testing and treatment orders? Indeed, is he aware that we are interested in the idea of drugs courts—which have been quite successful in the United States in discouraging reoffending? We need more drug treatment programmes in the community. Where there is a waiting list for drug treatment programmes, people will get into drug-based criminality sooner.
Does the Minister know that, today, the RAC Foundation has announced a campaign on driving and drugs? Will he give as much backing as possible to that campaign? Many deaths result from drugs and driving, and much could be done about them through labelling and by informing the public. Does the right hon. Gentleman recognise how much has been achieved by the hardening of public attitudes against drinking and driving? With the whole drugs problem, is it not true that there will be a very major change only when the public come to recognise and convey to others that the dangers posed by drugs and drugs misuse are such that people should not use them? The change of attitude that has happened on drinking and driving could happen with drugs. Currently, however, any change is not going the right direction.

Dr. Cunningham: I am grateful to the right hon. Gentleman for his strong support for what we are trying to achieve. Of course he is right to say that, even if our ambitious targets are fulfilled, a large and serious problem would remain. I listened to what he said about drugs courts, and he knows that some attention has been paid to the idea.
Drug treatment facilities in the community are not adequate, and there is a danger that people will have to wait so long that they will simply never receive any treatment. We are examining that issue, too.
As I am sure the right hon. Gentleman is aware, driving and drugs is already an offence. We are examining with the police the possibility of roadside testing for drugs abuse while driving a car, but we are not yet in a position to make a statement on that.

Mr. Paul Flynn: I welcome what seem to be two slight changes of direction in the Government's policy, and in that of all other Governments: the emphasis being placed on treating those who use hard drugs not as criminals, but as patients; and the way in which the Government are placing the greatest emphasis on hard drugs.
Sadly and tragically, however, the Government face the same fate—which is the result of years and years of failure—as every other Government of the past 20 years. In three years, when we face the electorate, the drugs problem will be far worse than it was when we came into office. In Britain, however, one awful new feature of that failure does not occur in any other country—the epidemic of heroin use among teenagers and younger children.
Is not the best way to tackle this not to spend 90 per cent. of our money and police and court time pursuing soft drugs, which the majority of young people use, but to try to collapse the evil trade in those drugs, which is in the hands of criminals? The only way that can be done—and it has been done in other countries—is to replace it with a market that can be regulated, licensed, policed and controlled. In Holland, that approach has spectacularly reduced the use of heroin. Can we not take a fresh look at what is happening in other countries, including Holland and Switzerland? Instead of repeating our old failures, we should imitate the success of others.

Dr. Cunningham: I am grateful for the first part of my hon. Friend's remarks. We are increasing the focus on class A drugs and on treatment, education, advice and rehabilitation. We think that is the right thing to do.
My hon. Friend says that our policies will meet the fate of all previous ones. I do not accept that as inevitable; it is a defeatist attitude. We deliberately set a long-term strategy—a 10-year programme—in the White Paper and we are at the very beginning of that programme. My hon. Friend may well be right to say that we face an epidemic—a huge increase in the use of heroin—and we must do our best to prepare for that, but I do not agree with him at all that we should decriminalise cannabis. All drugs are harmful and there is plenty of evidence around to suggest that not only soft drugs but alcohol and smoking at an early age are the precursors to later hard drug use among young people.

Sir Brian Mawhinney: Given that over many years under Governments of both parties Britain has developed one of the worst records of drug abuse in Europe, why does the Minister believe that continuing the existing strategic thinking and the presuppositions that underlie current policy will be any more effective in the future than it has been in the past?

Dr. Cunningham: The right hon. Gentleman is wrong. We are not continuing with existing thinking and the policies and assumptions that we inherited from the previous Administration. Precisely because we recognised that they were not working and that changes had to be made, we produced the White Paper, set the 10-year strategy and are changing the emphasis towards education and information, support, help and advice, and rehabilitation; and we are moving resources accordingly. We are doing that because previous policies were not working, as the right hon. Gentleman rightly said.

Dr. Brian Iddon: I too congratulate my right hon. Friend on shifting the emphasis to treatment and on the proposed concentration of enforcement measures on class A drugs. Is he aware that recent surveys have shown that the number of treatment places has fallen during the past three years, and that that is a real problem? There are just not enough people to deal


with drug addicts; even general practitioners are unable to cope with the problem. There is also a lack of available treatment, particularly for under-18-year-olds who are increasingly becoming addicted to substances such as heroin. Will the Government take urgent measures to train people up to deal with what is apparently an increasing problem?

Dr. Cunningham: I am grateful to my hon. Friend for his support and pay tribute to his excellent work as chair of the all-party drugs group. The Government issued clinical guidelines which were warmly welcomed by doctors. We are looking at providing more training and bringing together various agencies in local communities with the drugs action teams exactly because we need to bring more concentrated professional attention to these matters.

Mr. David Davis: I welcome the Minister's commitment to better information and draw his attention to the Public Accounts Committee report on drug smuggling that was published last week. The Committee was unpersuaded by the information supporting the effectiveness of the so-called intelligence-led strategy and the prosecution strategy pursued by Customs and Excise. I am concerned that the circumstantial evidence that he mentioned—namely, falling prices and the greater volume of drugs on the streets—suggests that that strategy may not be as effective as we would hope. Loth as I am to recommend another review, I ask the Minister to review the strategy, because that is the only way to stop youngsters getting drugs.

Dr. Cunningham: I have great respect for the work of the Public Accounts Committee and the views of the right hon. Gentleman, who is its Chairman. I freely acknowledged earlier that, although seizures have increased tenfold, the availability of class A drugs on the streets has not diminished. We need to do more if we are to make a significant impact, so we shall keep the issue under review.

Laura Moffatt: I warmly welcome today's announcement on the first annual report on the drug tsar's work. Does my right hon. Friend agree that the work of the drug action teams is important? I hope that he will congratulate the West Sussex drug action team on its work with voluntary organisations. The fact that an organisation is voluntary does not mean that it is not professional and does not do excellent work. That work needs to be evaluated to avoid duplication. Will the Minister ensure that the work is effective and that there is a proper distribution of work in communities so as to reflect the needs of those communities?

Dr. Cunningham: I am grateful to my hon. Friend. We are in the process of evaluating all drug action teams. Some are excellent, but others are not so good and their performance needs to be improved. We have developed a template of good practice for them all to study and use. I pay tribute again, as I did in my statement, to the excellent work done by some voluntary organisations nationally and locally. They are an important part of our strategy and teamwork.

Rev. Martin Smyth: I join those who welcome the report. We have a growing problem in

Northern Ireland, as the right hon. Gentleman is aware. We do not accept some of the direct action taken against drug dealers, including murder.
I have two points for the Minister. Is there a need for a change to legislation so as to prevent drug carriers from being able to insist on not being examined internally, meaning in effect that any doctor subsequently examining them could be guilty of assault? Secondly, the report says that there has been a decrease in the number of treatment centres. Sometimes they are in the wrong place. The need for the prison and probation services to protect funds may not allow enough money to be released to help get people off drugs at an earlier stage. Could more funds be allocated?

Dr. Cunningham: I am not sure about the first point that the hon. Gentleman mentioned, but I shall look into it with my colleagues. I acknowledge that there is a lack of facilities in some parts of the country and that in other areas the facilities are subject to such huge demand that people have to wait too long for access to treatment. We have allocated an additional £217 million. We shall shift resources to deal with the problem over time, but I cannot announce any additional resources today.

Mr. David Lock: I, too, welcome the report. I met the police in my constituency on Friday last week. Their drugs arrests are up by 250 per cent. over and above their target. I am sure that my right hon. Friend would like to pass on his thanks to them. Does he share their frustration that, having arrested people for possession with intent to supply or other drugs offences, they are unable to get them on to treatment programmes? That continues the cycle of offending.
Does my right hon. Friend agree that the beneficiaries of an increase in the number of treatment programmes would be not only the addicts, but those who would otherwise be the victims of crime? They should be the focus of the Government's policy on drugs.

Dr. Cunningham: I am grateful for my hon. Friend's support and I congratulate his local police authority on its performance. He made the same point as several other hon. Members have made, and I agree that we need to look closely at the availability of drug treatment centres for people, whether they have been arrested or not. We shall do that, and as we are able to move resources we shall continue to focus them on that area of policy. That is the important change in policy that I announced earlier today. We shall ensure that over time more resources are brought to bear on treatment and its availability.

Mr. Graham Brady: What proposals do the Government have for dealing with the menace of used needles, which are often found in parks and school playgrounds? They are a problem for those who are not themselves involved in taking drugs. In particular, will the right hon. Gentleman review a number of the so-called needle exchange programmes, which do not exchange needles but simply distribute them? Can the Government do anything to ensure that dirty needles are taken out of circulation?

Dr. Cunningham: I understand that in the best practices needles are exchanged regularly, and we should encourage everyone to follow best practice. I acknowledge that that is


not always done and that can cause a risk to the public, in respect of both drug addiction and AIDS. We must continue to encourage the development of best practice on that issue.

Mr. Ivan Henderson: May I inform my right hon. Friend that last week in my constituency two deaths were caused by the taking of heroin? Does he share my thoughts at this sad time for those families? I see the work of Customs in my area at first hand, and they—and our local police—do an excellent job of detecting drugs and of educating in our local schools. What more can the Government do to ensure that young people and children understand the dangers and possibly fatal consequences of taking such drugs? Would it be possible to include parents in drug education in schools?

Dr. Cunningham: Of course it is a tragedy when any young person—or anyone—dies from drugs misuse. If there have been two deaths in my hon. Friend's constituency recently, I extend my sympathies and those of the Government to the families involved. That is a graphic illustration of the dangers to people from drugs misuse.
Drugs misuse is not glamorous and it should never be glamorised. It should never be associated with success or with being cool. Drugs destroy lives, they disrupt families and they wreck careers. Drugs misuse almost inevitably ends in disaster for the people involved—sometimes imprisonment and sometimes, as my hon. Friend points out, death. That is the message that we have to bring home to young people everywhere and that is why we are concentrating resources on education, information and advice to the most vulnerable young people in society. I assure my hon. Friend that we shall continue to do so.

Mr. Phil Willis: I am sure that the Minister has not had a chance to read today's Yorkshire Post, but the headline reads
Heroin epidemic sweeps through rural Yorkshire".
Does he agree that until now we have mistakenly believed that the drugs epidemic is something that happens in urban areas, in inner cities and in deprived areas? In fact, it is spreading like wildfire, especially into the more affluent rural areas which do not have the infrastructure to support the clinics or the policing of the problem. I noticed that the Minister's statement did not refer to rural areas specifically, but that is not a criticism of him. Does he have any specific plans to address the deficit in our rural areas?

Dr. Cunningham: On the last point, I did not refer to urban areas either, but was speaking about the country as a whole. I can assure the hon. Gentleman that, having represented a remote rural area for 29 years, I recognise that these problems affect communities in all parts of the country. No community, rural or urban, is safe from the drug pushers and traffickers. For that reason, the policies are intended to cover the whole of the country.
I agree that some people mistakenly believe that these are inner-city problems only. They are not. I do not agree that drugs problems are spreading like wildfire, to use the hon. Gentleman's words, but they are serious and we need to be more effective in tackling them. That is what our strategy and the plan announced today aim to do.

Dr. Tony Wright: I commend my right hon. Friend on his report, and I commend too all the

people whose work he has described. However, is it not the sad truth that much of the work described in the report is undermined whenever the people to whom the young look up, such as pop or sports stars, are found to be users—often conspicuous users—of the hardest of hard drugs? What can he and the Government do to proclaim the message that those who have and exercise responsibility should behave responsibly too?

Dr. Cunningham: I very much agree with my hon. Friend. As I was just saying, public figures who glamorise drug taking, or who falsely present it as a good or fashionable thing that everyone does, perform a very damaging disservice to the young people of this country. There can be no compromise on the very hard line that we have to take with such examples, which of course undermine everything that the Government and the various local agencies are trying to achieve in raising young people's awareness of the dangers that they face by getting involved in the misuse of drugs.
Recently, there has been a series of high profile cases such as my hon. Friend described. I can only say that they are very damaging to the well-being of this country's young people.

Mr. Peter L. Pike: I accept that my right hon. Friend rightly wants to reduce the waiting time at treatment centres, which will benefit drug users and the wider public. However, does the report identify where waiting lists are unacceptably long? In which parts of the country are the lists longer than the average to which he referred? Is priority action being taken in those areas to ensure that the health authorities and other relevant local organisations take the action needed to deal with the problem?

Dr. Cunningham: The report does not specify those areas, but we are aware of where the problems occur, and are learning more all the time. We are therefore identifying those areas in which we must concentrate resources and activity. That is the work of the local drugs action teams, among others. As I have said, we are assessing their effectiveness. In due course, we shall produce a report on that work. My hon. Friend is right to draw attention to the fact that in some parts of the country the availability of treatment centres is inadequate. We need to work hard to improve that.

Mr. Michael Connarty: I thank my right hon. Friend for the vigorous and determined tone of his statement, in relation to both class B and class A drugs. I know that he is a great advocate of joined-up government, and I note that with him on the Front Bench today is my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth). My hon. Friend, who is Under-Secretary of State for the Home Department, will shortly be going to Colombia, where I was recently. In that country, a multinational industry has grown up in the production of cocaine and, now, of heroin, even though poppies do not grow naturally there.
Will my right hon. Friend assure the House and the country that this domestic report is linked to a determination to help the international fight against drugs? That fight is being conducted by bodies such as the anti-narcotics police in Colombia and Europol in Europe, through which new supply routes set up by the Russian


mafia bring more and more heroin and cocaine into this country, for use in the domestic market and for onward export to America.

Dr. Cunningham: I am grateful for my hon. Friend's support. I can confirm that we are addressing those matters internationally through the United Nations and by bilateral co-operation with, for example, the United States of America in the Caribbean. My hon. Friend is right to point out that we are confronted by huge, powerful, multinational cartels determined, for their own illegal gain, to supply class A drugs to our country and to others. They show no concern for the appalling damage and consequences that will result from their action. Through the Foreign Office, the Home Office and any other body, we shall seek more effective international co-operation.

Point of Order

Mr. Jim Murphy: On a point of order, Madam Speaker, of which I have given the hon. Member for Woodspring (Dr. Fox) notice. Scotland has a tradition of tolerance, but during Scottish questions today, the hon. Gentleman linked Scottish devolution with the balkanisation of Britain. It was a shameful soundbite, and I wonder whether you are able to invite the hon. Gentleman to withdraw it.

Madam Speaker: Order. That is a matter of argument, not a point of order. There is nothing in it for me to resolve.

Waiting Times (National Health Service)

Mr. David Amess: I beg to move,
That leave be given to bring in a Bill to require the publication of average patient waiting times for first outpatient appointments by specialty and average patient waiting times for treatment by specialty; and for connected purposes.
The national health service is in crisis. If my Bill becomes law, it will force the Government to address that crisis. The children, women and men who use the NHS are not concerned about the length of waiting lists. What worries them is waiting times, particularly for more serious illnesses.
Only today, an article has appeared telling us that a rising number of patients must wait more than six months to see a hospital doctor. The patients charter says that no one should face a delay of more than 26 weeks after being referred to a specialist. Yet by the end of March, 153,000 people had waited 26 weeks or more for a first consultation, and the number was up from 144,000 in the previous quarter.
My Bill is supported by my hon. Friends, who know that it is right. If any Liberal Democrats were interested in the NHS, they might have supported it too. The best that can be said of them, however, is that they like to be popular. Labour Members should also support the Bill as it meets their No. 1 priority—transparency. The Labour party is anxious to be seen to be transparent. If the Bill becomes law it will be transparent to all that the Labour Government have made an awful mess of our NHS since 1 May 1997.
The size of the waiting list is irrelevant to the patient. What matters is how long patients must wait for an operation. Patients have good reason for worrying about that. They may be in pain, or their condition may be deteriorating. A long list does not necessarily mean a long wait. Many patients could be quickly put through hospital in the days of the excellent Conservative Government, but that—sadly—happens no more.
Waiting lists are easily distorted, massaged and controlled, and we know of the Government's expertise in those areas. Waiting times to see consultants have increased, so that it takes far longer to get on a list at all. There are waiting lists for waiting lists for waiting lists. Waiting lists are also gatekeeper-controlled now. It is relatively easy to remove or recategorise patients who are on a waiting list for sound clinical reasons, but it is also easy to do so for more dubious motives.
Waiting list figures are not now comparable to those of five years ago because more stringent criteria are being applied before anyone is placed on a waiting list.
Management and direction of NHS resources based on waiting lists is a distortion of clinical need. Doctors prioritise patients according to clinical need and the urgency involved. Attempts simply to cut waiting lists for operation X, as this Government do all the time, mean that routine cases—for instance a non-life-threatening hernia operation—might be re-prioritised and performed sooner than an operation for a more serious condition.
That is why it is essential to know how long a patient waits to be seen in an out-patients department and how long it takes to be placed on a waiting list by medical or surgical specialty. It is important to know not merely the

average time, but the mode and range of waiting times. Obviously, a mathematical average can hide a variety of unpleasant surprises. If two patients are on a waiting list, one could wait 20 months and the other two. The average would be 11 months, but we have to consider the circumstances of the person who has to wait 20 months.
When in opposition, the Labour party used to wine and dine with the British Medical Association all the time. It appears that the BMA will support my Bill. It does not want people to wait for an unacceptably long time in pain and distress. It believes that waiting lists are rationing by the back door—in that, it is entirely right. Under the present system, a patient may be waiting in pain for a hip replacement in a queue behind someone with a benign and non-urgent skin condition. To meet performance targets, the patient with the non-urgent skin condition must be treated first if he or she has reached the 18-month list.
Then, of course, we have Her Majesty's Government's six fiddles on the waiting list. First, they have a subsidiary waiting list; secondly, a waiting list for the waiting list; thirdly, the withdrawal of routine operations; fourthly, prioritisation; fifthly, an administrative clean-up; and sixthly, reduced referral rates from general practitioners. That is an absolute disgrace.
I happen to have in my hand a letter. The person who wrote it will remain anonymous, but the letter mentions the specialties of general surgery, urology, orthopaedics and gynaecology. This very important person on a national health service trust writes:
I am informed that the patient's current position on the waiting list is irrelevant. The aim of the Trust is simply to reduce the waiting list to the numbers previously agreed with the Purchasing Authority.
That just about says it all.
I have been inundated with letters from the general public complaining about the length of time that they have to wait for operations. Mrs. X needs a heart bypass and she has an indefinite wait. Mrs. Y needs a hearing test and she has an indefinite wait. Mrs. Z needs an X-ray and she has an indefinite wait. Mr. X has a pain in the leg and he has an indefinite wait.
Mr. Sizer had an X-ray on 11 November 1997. He wrote to tell me that it was found that he had osteoarthritis. He says:
I might get my operation in August 99.
That is an absolute disgrace.
A doctor has written to me to say:
patients are waiting up to fifteen months before they are seen for the first time by a specialist and they are then put on a waiting list, where they will wait eighteen months before admission.
A Mr. Bartlam has written to me saying that in January 1998 he tore a ligament in his right shoulder. It will be more than two years from the time he suffered the injury before he is dealt with by the hospital. He writes:
Can you imagine having excruciating pain in your shoulder together with only limited use of your left arm for 2 years?
Finally, another doctor has written to me saying that he is attempting to treat a patient at a local hospital. The patient has been waiting about three months to date. On recent inquiries the doctor was told that the neurophysiology wait is at least 18 months and the orthopaedic wait 12 to 18 months.
There are even two people working in the House who have told me today about their cases. One has skin cancer, the other arthritis in both knees; neither can get anything done. I hope that the whole House will support the Bill because if it becomes law, it will be clearly seen that the national health service is in crisis, and that the only people to blame are the Government. Perhaps we might get the opportunity to elect a Government, a Conservative Government, who will sort the NHS out.

Question put and agreed to.

Bill ordered to be brought in by Mr. David Amess, Mrs. Angela Browning, Sir Sydney Chapman, Mr. Michael Fabricant, Mr. Andrew Lansley, Mr. Edward Leigh, Miss Anne McIntosh, Mr. John Randall, Mrs. Marion Roe, Mr. Robert Syms, Mr. Andrew Tyrie and Mr. Robert Walter.

WAITING TIMES (NATIONAL HEALTH SERVICE)

Mr. David Amess accordingly presented a Bill to require the publication of average patient waiting times for first outpatient appointments by specialty and average patient waiting times for treatment by specialty; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 11 June, and to be printed [Bill 111].

European Union

[Relevant documents: Developments in the European Union July-December 1998 (Cm. 4352);

The Second Report from the Agriculture Committee, Session 1998–99, on CAP Reform: Rural Development (HC 61) and the Government's Response thereto (HC 441);

The Third Report from the Defence Committee, Session 1998–99, on The Future of NATO: The Washington Summit (HC 39) and the Government's Response thereto (HC 459);

The Third Report from the Foreign Affairs Committee, Session 1998—99, on European Union Enlargement (HC 86);

Minutes of Evidence taken before the Foreign Affairs Committee on 19th May 1999 on the Cologne European Council (HC 462-i);

The First Report from the International Development Committee, Session 1998–99, on The Future of the EC Development Budget (HC 44).]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): The Cologne Council takes place against the background of the conflict in Kosovo. That provides a sombre backdrop for the meetings of the Heads of Government and Foreign Ministers, and will dominate much of our political discussion. It is, therefore, right that I should start this debate by addressing that conflict.
President Milosevic took three gambles when he launched his spring offensive in Kosovo. All three now look like losing bets. The first was that NATO would not have the stomach for a military campaign of more than a few days. On that point, even he must now know that he was wrong. Instead of abandoning the campaign, NATO has intensified it. There are now twice as many aircraft taking part in the bombing campaign as there were at the start. As NATO grows stronger in the theatre, the Serb war machine in Kosovo grows weaker. We have now destroyed in Kosovo alone 70 tanks, 134 personnel carriers and 140 artillery pieces. We have destroyed half the ammunition in storage in Kosovo.
Belgrade's propaganda machine may still refuse to face reality, but the troops in the Yugoslav army know exactly how badly they are being hit. Last week, an entire battalion left the front line and walked through the hills to home. Belgrade has tried to put a brave face on that mass desertion by saying that the commanding officer ordered them to go home and check that their families were well. That does not sound like standard practice for a disciplined unit in the front line. On the contrary, it confirms that demoralisation and indiscipline among the Serb conscripts is now so deep that the army cannot halt mass desertion.
Milosevic, of course, is not moved by the casualties of the Serb conscripts, and he will try to sit out the campaign if he believes that NATO will be the first to give up. We have already shown that we have the superior force. We must now show that we have the greater determination if we are to convince Milosevic that the only exit for him is through accepting our demands.
Milosevic's second gamble was that the bombing campaign would secure his political base by rallying the nation behind him. That worked for a while, but like so many of Milosevic's manoeuvres, it has proved a


short-sighted calculation. In the past week, and again over the weekend, we have learned of protests, demonstrations and near riots against the war in more than half a dozen towns in Serbia.
In Krusevac, several thousand mothers and families stoned the town hall and demanded the return of their sons. In Aleksandrovac, a similar crowd chased the mayor through the streets when he attempted to put the official line. In Cacak, the residents have formed a citizens parliament to discuss their grievances with the regime, and their disagreement with its actions in Kosovo. Addressing that parliament, the mayor said:
All that is happening is very ugly…someone should be held accountable…We want those who led us into this adventure to realise they must go.
Much of the grievance that prompts those protests comes from the knowledge that it is the sons of the provincial towns and the countryside who have been called up to do the dirty work, while the sons of the better-connected families in Belgrade are exempt.
However, even in Belgrade, open dissent is now on the increase. Two years ago, there were mass protests in Belgrade after Milosevic refused to recognise the election as mayor of Mr. Djindjic. As a result of threats directly inspired by Milosevic and his wife, Mr. Djindjic has now fled to Montenegro where he has called for an end to Belgrade's repression in Kosovo and for Milosevic to go when the war is over.
Mr. Djindjic's story illustrates the importance of Montenegro as a haven for those who speak out against Milosevic. In about an hour's time, I shall receive President Djukanovic of Montenegro on his visit to Britain. On behalf of all Members of the House, I shall congratulate him on the courage he has shown in opposing Milosevic's ethnic cleansing in Kosovo, and on the generous spirit in which he has kept open the borders of Montenegro to the hundred thousand refugees who have crossed over from Kosovo.
The best way in which we can now support Montenegro and all those people who want to see Milosevic go is to deny him the opportunity, which he desperately wants, to claim victory. The best blow that we can strike for freedom and democracy in Yugoslavia is to show that his confrontation with NATO ends in failure.
Milosevic's third gamble was that he could persuade NATO to accept failure and to back off in view of his programme of sustained atrocities against the Kosovo Albanians. That gamble has spectacularly backfired in his face. The more that the Governments of NATO learn of the brutality and butchery that he has ordered in Kosovo, the more they are determined that such aggression cannot be tolerated and will not go unpunished.
At the weekend, we saw further evidence, if any more were needed, of the barbarity with which Milosevic's forces behave in Kosovo, when more than 500 men staggered over the border, telling of how they had been abused and starved in a Serb prison. One man had been beaten with wooden clubs across his hands until every finger had been broken. He is a tailor. It must be a matter of doubt whether he will ever be able to return to his trade.
This morning, I was joined at our daily press conference by rape counsellors from the camps in Macedonia. The Albanian women who have been humiliated by the Serb troops are reluctant to speak publicly, but they have been speaking privately to rape

counsellors. This morning, one of those counsellors—evidently moved by what she had had to hear—described how she had counselled a family of a mother and five daughters, all of whom had been raped.
It may be that Milosevic's thugs thought that they could get away with such brutality because, after all, that is the way in which they have behaved for a decade. The reports of ethnic cleansing, rape of young women and massacre of young men are chillingly familiar from the behaviour of the same Serb forces during the civil war in Bosnia. At that time, it took the international community three years to muster the resolve to launch an air campaign. This time, the Governments of NATO are agreed that Milosevic must be faced down now. If we do not want to see another instalment of the same brutality visited on Montenegro, Sandjak or Vojvodina, we must demonstrate that aggression does not pay by forcing Milosevic to reverse the ethnic cleansing in Kosovo.

Mr. Andrew Tyrie: May we conclude that it remains NATO's policy that Milosevic should be arraigned as a war criminal, and that there is no possibility that we will negotiate with him?

Mr. Cook: It has never been NATO's policy that Milosevic should be arraigned as a war criminal. That is a judgment for the International War Crimes Tribunal for which, as members of the United Nations, we all share responsibility. We set up the tribunal as an independent body with an independent prosecutor. I can assure the hon. Gentleman that Britain is sharing with that prosecutor all the information that we have on the atrocities in Kosovo, including some sensitive intelligence that we would not previously have shared on that scale with a court. We are leaving the prosecutor to come to a judgment as to whether an indictment should be brought.
As for dealing with Milosevic, I repeat what I have previously told the House: I shall deal with whoever has effective power in Belgrade to deliver our objectives. There will be no negotiation on those objectives and there will be no compromise on the key objective that the refugees must return in safety under the protection of an international force with a NATO core.

Dr. Norman A. Godman: rose—

Mr. Tam Dalyell: rose—

Mr. Cook: I can think of no one better to give way to than my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman).

Dr. Godman: When my right hon. Friend meets the President of Montenegro in 58 minutes, will he be able to outline plainly the role that the European Union will play in the reconstruction of those communities that have been razed by Milosevic and his murderous thugs? Surely the European Union will have to play an important interventionist role, especially where funds are concerned.

Mr. Cook: We are already conducting detailed discussions among our close allies and other members of the Security Council—including Russia—about the structure of the international presence that will follow the


end of the conflict. It is agreed on all sides that the European Union will be the lead agency in the economic reconstruction of Kosovo and the physical reconstruction of its villages and towns.
We have already given 13 million euros in assistance to Montenegro to help it through a severe budgetary crisis caused by both the presence of the refugees and the loss of much of its trade through Serbia. I will explore with President Djukanovic how a democratic Montenegro, under the leadership that has provided the present policies, can play its part in the new start that we offer to all the countries of the region for an open trading area and a Balkan regeneration plan which will accelerate the integration of those countries into a modern Europe. We also hold out the prospect to the people of Serbia that they can be part of that programme if Belgrade turns its face away from the policies of fascism rooted in the middle of this century.

Mr. Dalyell: What is NATO's assessment of the damage caused so far to the environment by ammonia, benzene, mercury, phosgene and other pollutants as a result of attacks on chemical factories?

Mr. Cook: My hon. Friend will welcome the news that the United Nations Environment Programme today submitted its report on its assessment of the environmental hazards in Serbia and concluded that the environmental damage was minimal. My hon. Friend will also be aware that the United Nations Under-Secretary-General today completes his tour of Yugoslavia, which has included some days spent in Kosovo assessing the humanitarian impact of the Serb forces' activities. I will share with the House his conclusion at his press conference as he left Montenegro. He said:
One word—it is pretty revolting.
The Under-Secretary-General described town after town that has been reduced to a ghost town—emptied of a population who have fled in terror—and houses that have been burnt and destroyed. The impact of Serb forces on the environment in which the people of Kosovo lived is far greater than anything we have done in Serbia.
At the end of last week, I visited Washington. That visit demonstrated the solidarity of our two countries and our joint resolve to secure the objectives of NATO. Tonight, I set out on a tour of Rome, Bonn and Paris to consult my colleagues in the major European capitals of the alliance. I want to take stock with them on the success of our military campaign and the progress of the diplomatic initiatives. As both the military and the diplomatic tracks gather momentum, it is important that we prepare now to be ready for the day when we can escort the refugees back.
Britain is urging that we get on with those preparations so that we are ready to enter Kosovo as soon as our diplomatic initiatives have secured agreement on our objectives, or when our military campaign has left the Serb forces unable to cling on inside Kosovo. We will be exploring with partners what contribution we can each make to ensure that NATO has a balanced force with a broad base across the alliance, ready to move whenever the time comes for the refugees to go home.
Whether or not it is a member of NATO, every European Union member state is solidly behind our key objectives: the Serb forces must get out of Kosovo, NATO troops must be allowed into Kosovo, and the refugees must be allowed back in safety.

Mr. Bowen Wells: Is proper provision being made to enable the Kosovo refugees to go home? They will need prefabricated homes in their present location in Albania or Macedonia, which they can pack up and take back to Kosovo to erect in their villages and towns while they rebuild their homes and the surrounding infrastructure. Has funding been made available and have preparations been made for that objective, and will the Foreign Secretary discuss it with all his interlocutors in the next few days?

Mr. Cook: The hon. Gentleman raises a serious issue, and speaks from a great depth of knowledge and interest in the subject. We are currently exploring with humanitarian agencies and our allies the important pre-positioning, within the region, of the building materials that we shall need to assist the refugees to get through the winter. Whether the refugees spend that time in Kosovo or elsewhere, building materials will be relevant to the winterisation programme. I hope that with the United Nations High Commissioner for Refugees, we will be able to proceed with that prudent contingency for winter. We have consistently demanded that when the refugees return, they should be accompanied by free, unhindered entry of all the relevant humanitarian agencies.

Mr. Douglas Hogg: The right hon. Gentleman referred to the entry of NATO forces into Kosovo when the Serb forces are, in his words, unable to cling on. To what extent does he contemplate using or involving forces from outside NATO, particularly from countries belonging to the Organisation for Security and Co-operation in Europe, and to what extent have there been talks with OSCE countries with a view to deploying their troops, with NATO troops, into Kosovo?

Mr. Cook: There have been discussions with a number of countries, inside and outside the OSCE, that might be willing to make a contribution, and some Islamic nations would want to participate in our force to pacify Kosovo and guarantee the ceasefire. NATO has a number of partners for peace that have also expressed an interest in taking part and, in the past few weeks, we have had direct discussions with Russia.
We have always stressed that to be credible and effective, that international military presence must have a NATO core with a NATO command structure, but we have also made it plain that it will not be an exclusively NATO show. On the contrary, we would welcome other partners, who are anxious to contribute to Kosovo' s reconstruction, working with us to demonstrate the broad range of international opinion that condemns the atrocities in Kosovo.
I am confident that when we agree the communique of the Cologne summit, it will affirm our joint resolve to complete the task and deliver on those key objectives without compromise. The Cologne summit will, however, also address a wide-ranging agenda. The key issues before


the summit reflect this Government's priorities for a Europe of reform, a Europe of the people and a Europe of strength in the world.
Let me start with the reform of Europe. The Government recognise that Britain's future lies in Europe. We believe that our people will be more prosperous if we deepen our trade and ties with Europe, and that their Government will have more, not less, influence around the world if we act as one with our partners. The fact that we are for Europe does not, however, prevent us from arguing for reform of Europe. On the contrary, the respect that the Government have gained in every capital of the European Union achieves far more than the Conservative party ever secured when it was in government. That respect and credibility gives us a strength when we argue for reform which the previous Government never had.
At Cologne, Romano Prodi will report on his plans for modernising the Commission. We very much welcome his commitment to the guiding principles of transparency, accountability and efficiency, and his pledge to the European Parliament that he wants a culture in the Commission that has "zero tolerance of corruption". [Interruption.] I do not know why Opposition Members should find anything funny in zero tolerance of corruption. We should surely try to build a consensus in the House on that. I assure hon. Members that I shall say more contentious things later, but on that I had looked for bilateral support.
We shall judge the proposals that Mr. Prodi submits at Cologne by whether they address many of the endemic weaknesses of Commission practice. Following the dramatic report of the committee of wise men, we circulated among all our partners the priorities that we believed must be addressed: recruitment should be objective and fair; promotion should be on merit, not on patronage; contracts should be awarded by procedures that are transparent and open; and the inspection of fraud should be independent and robust.

Mr. Tim Loughton: Does the Foreign Secretary think that his Government gained respect in the capitals of Europe when his Members of the European Parliament voted to keep a corrupt Commission in power for yet more months, which has now been forced to resign?

Mr. Cook: The European Parliament took no such decision. The treaty sets out that the Commission will remain in power until a new Commission is appointed. The European Council moved fast to appoint a new President, who is actively constructing the new Commission. As soon as that Commission is in place, the treaty provisions will take effect and the previous Commission will leave. The European Parliament did not vote to keep the Commissioners in office, nor did the European Parliament have the power to vote them out of office.

Mr. Michael Connarty: To return to the point about the independence of fraud investigations, would it not be better for the new fraud investigating organisation to be outwith the Commission, so that it does not fall into the same trap as the previous organisation, which became part of the culture of the Commission?

Mr. Cook: We are clear that there must be changes in the structure so that the investigation of fraud is

more independent. Fraud is theft from the taxpayers of Europe. The citizens of Europe are entitled to expect their funds to be spent with the same care and the same accountability as they demand from their national Government. At Cologne, we will be demanding that the management of the Commission matches up to the best standards in public administration.

Mr. Andrew Lansley: I am not sure that I understood the Foreign Secretary's reply to his hon. Friend the Member for Falkirk, East (Mr. Connarty). Surely ECOFIN is today agreeing an anti-fraud system that is within the Commission, not independent of the Commission. Is it not necessary that the anti-fraud activity be outside the Commission and independent of the Commission?

Mr. Cook: I fear that the hon. Gentleman has misunderstood what was approved at ECOFIN. It was agreed that the new fraud investigation should be independent of the Commission, but should be within the European institutions. That reflects a judgment that if it were entirely outside, it would not get the access that it requires to be an effective invigilator. The development that we secured at ECOFIN today gives much greater independence and strength to the fraud investigator than ever occurred during the 18 years in which hon. Gentlemen were bleating about fraud.
Cologne will mark another step towards the creation of a people's Europe. We believe that if the European Union is to belong to the people, it must be driven by their priorities. First among their priorities is the opportunity of a job, or the security of the job that they hold. At Cologne, the German presidency will submit its proposals for an employment pact. We will want to ensure that the final text promotes economic reform and reflects the priorities of this Government in training the long-term and young unemployed.
We also welcome the initiative by the presidency in proposing a European charter of rights. In our view, that should not attempt to break new ground, but should consolidate in one place the many rights and freedoms that are already guaranteed in European legislation.

Mr. William Cash: Does the Foreign Secretary agree with the German Foreign Minister, Mr. Joschka Fischer, when he said that the decisive task of our time in relation to Europe is the creation of a legal entity in international law? Does he accept that that would effectively be a European constitution? Would he go along with the idea, or will he dismiss it now, in the House?

Mr. Cook: I have a feeling that I dismissed the idea three or four months ago, when the hon. Gentleman last put it to me. For the record, we are not proposing a constitution of Europe. We are proposing that a charter of rights should codify in a single place the rights that already exist in European legislation.
I say to the hon. Gentleman that we should not be afraid of that concept. We have a national interest in insisting that membership of the European Union should underpin freedoms and rights throughout every member state. That is why we broadly welcome that European charter of


rights, which will strengthen the identity of the European Union as an area of freedom, security, justice and equal rights. I am sure that he also would wish to achieve that.

Mr. Nicholas Soames: Will the Foreign Secretary give way?

Mr. Cook: I will certainly give way to the hon. Gentleman, but then I must, if I may, make some progress.

Mr. Soames: I am sorry to ask the Foreign Secretary to give way after he has done so, so often. If the employment pact paper does not reflect the steps taken by his Government, what will he then do?

Mr. Cook: I can assure the hon. Gentleman that we are already in dialogue with the German presidency on the text. I have seen a draft and can assure him that even he—and, even more so, some of his colleagues—will find it hard to regard it as threatening. It does not pose a major challenge to us, and it builds on work that has been done over the past two years in the European Councils. For example, the work that was done at Luxembourg secured employment guidelines which very much reflect the Government's priority of training for the long-term and young unemployed.
The text builds also on the decision taken at Cardiff that we should promote economic reform and require national reports on progress in the liberalisation of product and labour markets. Those reports are now coming in and will be summarised for us by the Commission when we meet at Cologne. I can assure the hon. Gentleman that the work, which is progressive and cumulative, and which builds on those previous achievements, will reflect our priorities.

Mr. Stephen Dorrell: Will the Foreign Secretary give way?

Mr. Cook: I will, but then, if I may, I must finish my speech. I appreciate that many of the Members who are intervening will wish to make speeches themselves.

Mr. Dorrell: I am grateful to the Foreign Secretary for giving way. I want to follow up the point on which my hon. Friend the Member for Mid-Sussex (Mr. Soames) was probing. The Foreign Secretary said that he has seen a draft of the pact and thinks that it is satisfactory. Can he confirm that it includes, as was promised in the European socialist manifesto,
agreed reductions in working time negotiated between the social partners"?
Is that inside the pact or not?

Mr. Cook: The pact proposes greater dialogue between the social partners, but the particular passage chosen by the right hon. Gentleman—I remember very well the discussions on it—leaves it to the social partners within nations to decide for themselves. The terms in which it is drafted make it plain that the measure will not be imposed by the national Government, far less by the national Governments of Europe meeting in the Council of Ministers.
To turn to the last of the three areas in which Cologne will mark a step towards our objectives for Europe, there will be further progress towards achieving strength in the world for the European Union. We expect that the Cologne summit will endorse the Franco-British initiative, which we launched at St. Malo, for an enhanced capacity for the European Union to take decisions on security in support of our common foreign policy.
At Washington, in the NATO summit, Britain was instrumental in brokering a deal that will give Europe access to the common assets of NATO when we undertake military commitments in which the whole of the alliance is not engaged. At Cologne, we must make sure that Europe has the capability to take responsible decisions on security and the military capacity to carry out those decisions.

Mr. Cash: Majority voting.

Mr. Cook: No, that will be done by consensus.
I stress that that project is not in any way aimed at providing a substitute for NATO. The warm support at Washington from the United States for our initiative shows that we have been successful in designing proposals that will not decouple Europe from NATO, will not duplicate the functions of NATO and will not discriminate against members of NATO who are not members of the European Union. NATO will be stronger, not weaker, if we can make its European pillar more cohesive and more effective.
In sum, we will be working to achieve at Cologne real progress towards a Europe that is reformed, that responds to the priorities of its people and that is capable of exercising real strength on their behalf. We will be working to make a success of the summit and to show that Europe works. That provides quite a contrast with the Conservative party which, when in power, went to European summits to prove that Europe could not work. Those memories of glorious isolation still linger in the Opposition—or, at least, in some quarters of the Opposition; not in all. I recognise that some Opposition Members are isolated in their own party in resisting isolation within Europe.
The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) has criticised me for signing up to a European manifesto for next month's European elections. In case he thinks we are worried about that, let me tell him that it is precisely because we have a score of sister parties throughout Europe—most of them in government—that we are able to secure a better deal for Britain. It is a sign of strength, not weakness, that we are able to stand on the same manifesto, with the same commitments, as the governing parties of most of Europe.
Let me remind the right hon. and learned Gentleman that his party also has sister parties, such as the European People's party, and that they have a common manifesto. The European People's party manifesto opens with the ringing promise:
"We will not try to win your vote by saying different things in different places. We will present the same ideas to everyone everywhere."

Mr. Michael Howard: We have not signed up to it.

Mr. Cook: Let me tell the right hon. and learned Gentleman, if he does not already know, that five of his


Tory MEPs are on the executive of the European People's party, and that one of them presided over the working group that produced the home affairs section of the manifesto. Those who are standing for the Tory party in the election have signed up to it.

Miss Anne McIntosh: Will the Foreign Secretary give way?

Mr. Cook: I will later.
If the right hon. and learned Gentleman has studied the manifesto, I understand why he is anxious to say that the Tories have not signed up to it. In the very first section, we find a commitment to
the harmonisation of European legislation in asylum and immigration, with European criteria at all European borders.
We also find that the European People's party considers that
the single currency is the foundation-stone of what we intend to be a new era.
The manifesto says:
A federal Europe is now more than ever a necessary objective.

Mr. Howard: I am awfully sorry to spoil the right hon. Gentleman's fun, but can he produce a scintilla of evidence that the Conservative party has signed up to that document? We are not members of the European People's party; we are not bound by the document; we have not signed up to it; and we have made it absolutely clear that we disagree with it. We are candidates for the elections, but we are standing on the manifesto of the British Conservative party.

Mr. Cook: What the right hon. and learned Gentleman says will come as news to many of his Tory MEPs. Two of the vice-presidents of the European People's party are Tory MEPs. The treasurer is a Tory MEP. The person who presided over the group that produced the section on home affairs that I just quoted is a Tory MEP, Mr. Perry. If the right hon. and learned Gentleman is saying that the Conservatives cannot agree with those policies—

Mr. Michael Jack: On a point of order, Mr. Deputy Speaker. I understood that it was the practice of speakers to address their remarks through the Chair. I observe that the Foreign Secretary has spent a great deal of time looking in the opposite direction. Is he in order?

Mr. Deputy Speaker (Sir Alan Haselhurst): The point raised by the right hon. Gentleman is obvious to all right hon. and hon. Members, but I do not think that it is worth an interruption of the debate.

Mr. Cook: Thank you, Mr. Deputy Speaker. I am happy to turn around if it assists the Chair.

Miss McIntosh: Will the Foreign Secretary give way?

Mr. Cook: No.
The right hon. and learned Member for Folkestone and Hythe is right to say that the Conservatives have their own manifesto. It is a manifesto dripping with commitments to oppose, to fight, and to opt out of what other member

states want to do. The Tory manifesto was plainly written by people who regard Brussels as a dangerous beast that must be wrestled to the ground.
In their hearts, the Tories are afraid of Europe. [Interruption.] They are. Their manifesto makes it clear that they think that half of what Europe wants to do now is a mistake, and should be fought. As they have no allies—and the right hon. and learned Gentleman has been anxious to disown any that they might have—it is a fight that they are doomed to lose; but, in the meantime, they will guarantee that no other member state listens with patience to what they have to say.
By contrast, the Government have shown that constructive engagement in Europe can produce a better deal for Britain. By building alliances, we have secured an agreement to end the beef ban, which the Conservative party failed to shift by a strategy of disruption. We have won a bigger increase than any other member state in the number of regions eligible for objective 1 status from the structural funds. We have secured a clear legal base, for the first time, for Britain to retain border controls. We have cut the food bill of the average British family of four by £65 a year. We have brought the benefits of the social chapter and the working time directive to every British employee.

Mr. Loughton: That is fantasy island.

Mr. Cook: The hon. Gentleman may say that it is fantasy, but it is no fantasy to the 2.5 million British workers who now enjoy paid annual leave for the first time. If the hon. Gentleman and his Front-Bench colleagues still think that we are wrong and that the directive is Brussels red tape, perhaps before polling day they would make it clear to those 2.5 million voters and their families that the Conservatives believe that the decision was wrong.
The Government see Europe as an opportunity to make our people more prosperous, our freedoms more secure and our voice carry further around the world. We see a strong and healthy Europe not as a threat, but as an asset to Britain. That is why we go to Cologne with more respect from our partners than the Conservative party ever had, and with more trust from the British people that we can shape the Europe of the future that will serve them.

Mr. Michael Howard: The Cologne Council takes place at a vital time for the European Union. There are many decisions to be taken, which will prove crucial in determining Europe's future development. One subject is more pressing than any of the others: it is the need to make decisions in the next few days about the course of the conflict over Kosovo.
We share the horror expressed by the Foreign Secretary at the atrocities committed by the Milosevic regime. All the commentators now seem to agree that if the refugees are to return home in any number before the onset of winter, a decision will have to be taken very soon about the deployment of many more allied ground troops in the region. Indeed, that is no longer denied by the Government.
As I have said before, the language used by the Government to describe the circumstances in which ground troops should be committed has repeatedly


changed. First, it was only after a peace agreement had been signed, then it was in a permissive environment, then the phrase used was "semi-permissive", and in the past few days it has been "non-permissive." As I have also said, those changes may be justified, but they must be explained. The justification needs to be set out, not in a way that gives any advantage to Milosevic, but so as to present the Government's strategic thinking to the nation and to the House.
If that were done, I suspect that both the nation and the House would endorse that action. At the moment, Parliament is being asked to present the Prime Minister with a blank cheque. That is not the role of the House, and it is not the way in which we carry out our responsibilities in a parliamentary democracy. In the absence of a convincing explanation, we shall continue to scrutinise, question and, when necessary, to criticise the Government's conduct.
We wish the Foreign Secretary well in his visit to Rome, Bonn and Paris. We have supported NATO's objectives from the start. As the purpose of his visits will be to further those objectives, he carries with him our support and our good wishes for the success of the discussions in those capital cities in which he will no doubt participate.

Mr. Dalyell: How would ground troops be put in, given that access through the port of Thessaloniki will almost certainly be denied by the Greeks—if not by the Greek Government, certainly by the Greek workers? Piraeus is not available, as the mayor of Athens has said that not a single dock worker will lift a finger. They can hardly go through Hungary with 350,000 ethnic Hungarians. The Macedonians, when they were on the Inter-Parliamentary Union visit, made it abundantly clear that they did not want their country to be used as a springboard. To go through Albania with 6,000 ft mountains and roads that peter out would be a major problem. How would ground troops be supplied once they were there, if they got there?

Mr. Howard: Those are cogent questions. The hon. Gentleman must direct them at the Foreign Secretary. I have not taken part in any discussions or negotiations with the Greek Government, the Hungarian Government or any of the other Governments in the region. Certainly, as part of the convincing explanation that I seek, the reasonable points that have been raised by the hon. Gentleman will have to be answered. It is, of course, for the Foreign Secretary to answer them.
I have one question on Kosovo for the Foreign Secretary. I hope that he now, or the Minister of State, Foreign and Commonwealth Office in her winding-up speech, will assure the House that he will continue to argue that any military presence in Kosovo, whenever it enters that tragic and devastated land, will be NATO led.
Kosovo is the most urgent question on the agenda at Cologne, but it is by no means the only one. Other issues are vital, too. The German presidency has in many respects been a defining period. The arrival of the single currency in January was a sign of things to come. As the

president of the European central bank said at the time, it meant that monetary policy, which had been, in his words,
an essential part of national sovereignty",
would in future be
decided by a truly European institution".
As a result, it seemed that Europe's leaders felt able to be even more explicit about their intentions. Germany's Minister for Europe, for example, made his position clear:
Normally a single currency is the final step in a process of political integration. This time the single currency isn't the final step but the beginning. Inevitably it will happen".
Germany's Foreign Minister said:
Political union, including new member states, must be the lodestar from now on—it is the logical follow-on from economic and monetary union.
He said that turning the European Union into an entity under international law, with a common constitution, is
the decisive task of our time.
Then along came Mr. Prodi, who said:
Europe needs a strong Government
and that the Commission "will be the Government." He went on to say that, in due course, just as a European single currency exists, so there should be a single European army.
Therefore, the agenda of the integrationists on the continent of Europe is clear: one currency, one tax policy, one employment policy, one legal area, one army—what else is needed to create a single European state? Why do the integrationists here deny it? Why, alone in Europe, do they pretend that they do not subscribe to that vision?
Why did the Foreign Secretary say, flying in the face of all the facts, in his interview with the New Statesman last August, that
Maastricht was the high water mark of integration"?
Did he not realise that the ground would be cut from under him within months by the Downing street spokesman who told The Daily Telegraph on 26 March:
Integration is part of our mantra … The Prime Minister is busy integrating now.
Did the Foreign Secretary not foresee that, within weeks of that interview, he would be writing to me listing the areas that would remain the preserve of national Governments as to how we run our education and health systems, the welfare state, personal taxes and matters affecting our culture and identity? There was no mention of corporate taxation or any taxation other than personal taxation; no mention of asylum or immigration. They are clearly not matters that, in the Foreign Secretary's view, should remain the preserve of national Government.
In that letter to me, the Foreign Secretary explicitly identified defence as a suitable area for integration. Very few people witnessing the European contribution to the crisis in Kosovo would deny that there is much scope for closer co-operation among the European members of NATO in relation to defence. But co-operation is not the same as integration, and integration outside the framework of NATO, as is explicitly envisaged in the St. Malo agreement that was signed by the Prime Minister at the end of last year, could do great damage to the alliance between Europe and America in the form of NATO, which still remains critical to the future peace and prosperity of the world.
We have still to receive answers from the Government to the most basic questions on the future of European defence as they see it.

Mr. John Smith: Can we assume from what the right hon. and learned Gentleman says that he rules out the possibility of a European defence architecture even within NATO?

Mr. Howard: I have no idea what the hon. Gentleman means by the phrase "European defence architecture". As I have said, I am in favour of closer European co-operation on defence matters within NATO; that seems to make total sense. The problem up to now for European members of NATO in relation to defence matters has been not the lack of any institution or architecture, but the lack of agreement. Far too often, the European members of NATO have disagreed among themselves on what they should do.
We have still to receive answers to some basic questions. What is to be the position of the countries that are members of NATO but not of the European Union—Norway, Iceland and Turkey, and the new entrants—Poland, Hungary and the Czech Republic? What is to be the position of the members of the European Union who are neutral but are not members of NATO—Austria, Sweden and Ireland? As a senior civil servant told The Guardian on 26 October:
It is refreshing but a bit unnerving for us to have a Prime Minister who is prepared to launch a major policy debate without knowing where it is going to end up.
The leader of the European socialist party, at any rate, is under no illusions about where it will end up. On 12 January, Pauline Green said:
We believe in the extension of majority voting on everything except changes to the Treaty, the membership of new countries in the European Union and taxation issues.
So there we have it: a single European army committed to action—or, perhaps more likely, prevented from action—by majority voting. That is the socialist prescription for European defence, and it is a prescription that the Opposition utterly reject.
Defence is by no means the only matter on which the Government are working towards further integration. If the Governments of Europe were serious about taking action to reduce the number of people without jobs in Europe—more than 16 million of them—they would be spending their time in Cologne discussing how to cut down regulations and red tape. Instead, they will be discussing the so-called employment pact—which should be renamed the "unemployment pact", as it contains more of the policies that created Europe's tragic unemployment levels initially.
As my right hon. Friend the Member for Charnwood (Mr. Dorrell) has just pointed out, the manifesto on which the Labour party will be fighting the elections to the European Parliament talks about negotiating with the so-called social partners—union leaders and business organisations—at a European level. Now just imagine the uproar there would be if the Government legislated to make agreements between the Trades Union Congress and the Confederation of British Industry binding on all British firms. Everyone would realise that such an arrangement is far worse even than the mess that we got into under a Labour Government in the 1970s. Yet, these proposals are even worse than that.
The proposals would provide that agreements between trade unions and employers organisations at European level are binding on British firms—and we know the type of thing that they have in mind. Labour's manifesto for the European elections specifically talks about the further restrictions on working time that it wants to see. We know that the Commission wants to extend the working time directive to the transport industry, as if that directive had not created enough havoc already.
We know that the Commission is going ahead with its proposals on works councils—proposals that the Government themselves oppose, but which they are now powerless to prevent because they signed up to the social chapter and the extension of qualified majority voting that it provides. We also know that the German Minister for Europe has called for a co-ordinated wages policy.
Two weeks ago, the Economic and Finance Council agreed to make
fiscal and monetary policy as well as wage developments mutually supportive.
Perhaps the Minister will tell the House how that is to be achieved without inhibiting the private sector's ability to determine the salaries that its employees are paid.

Mr. Hogg: My right hon. and learned Friend has identified a major threat to Britain's industrial future. However, is he not notably concerned about another aspect of it—that the European Court will itself be able to interpret the agreements? Does not its track record suggest that it will drive forward the agreements to encompass matters that were not contemplated even by those who made them?

Mr. Howard: My right hon. and learned Friend is entirely right. We could point to numerous examples of that.
The Labour party claims that at long last it has learned the lessons of the disastrous prices and incomes policies for which it was responsible in the past, but it now proposes to introduce them at a European level.
There is also the matter of tax harmonisation. At Cologne, Europe's leaders should be welcoming the effect of tax competition in creating an incentive for European countries to get their taxes down. Instead, we shall see more tax harmonisation to which yet again Labour is committed in its manifesto. It is perhaps hardly surprising that the Government should be prepared to give up their veto on taxes; they are not prepared to exercise the veto, even when they have got it. We still have no assurance that the Government will exercise their veto on the withholding tax which will do so much damage and destroy so many jobs in the most successful sector of the British economy. Indeed, so much importance do the Government attach to this measure; so high does it come on its list of priorities, that the Deputy Prime Minister had clearly never even heard of it until he was memorably questioned about it by my hon. Friend the Member for West Worcestershire (Sir M. Spicer) just a few weeks ago.
This morning, in another example of the Government's well-honed spinning tactics, we were told that the withholding tax had been toned down—not withdrawn, but toned down—so presumably the damage that it will do to British jobs and British commercial success will also be toned down, but not withdrawn. That simply will not do. The withholding tax should be vetoed at


ECOFIN today. Anything less would be an abdication of the Government's responsibility to those whose interests they are charged to defend. However, the withholding tax is by no means the only tax harmonisation measure that we face. So sensitive are the Government about the extent of the proposals that one has to go to a Dutch Government website to find out what they are about—on the very day that the Government published their draft Bill on freedom of information.

Mr. Loughton: My right hon. and learned Friend might be interested to know that a press agency has just reported that the Chancellor has given in on the withholding tax. He has not used his veto, so the country will have to accept it subject to certain clauses. Would my right hon. and learned Friend like to comment on that?

Mr. Howard: Well, I did not know that. It is extremely bad news for jobs in this country and for what is perhaps the most successful part of the British economy. It is indeed a black day. If it is true, the Government should make a statement to the House explaining why they have surrendered in this fashion.

Mr. Jack: I very much support my right hon. and learned Friend in calling for a statement, particularly bearing in mind the assurances that the Prime Minister gave me in answer to an oral question in the House saying that the veto would be used to prevent the withholding tax from being imposed on the United Kingdom.

Mr. Howard: My right hon. Friend will be well aware that the Chancellor has repeatedly refused to repeat the assurance that the Prime Minister gave him. As he rightly pointed out, that is a serious matter.
Labour MEPs have already voted for the British veto to be abandoned "as a general rule" in much of the tax field, making Britain powerless to resist higher European tax rates.
There it is—in a nutshell. More red tape, higher taxes—the very measures that have crippled Europe's ability to compete with the rest of the world are to be reinforced and extended.
The proposals continue to spew out of a Commission that should not still be there. So discredited a body has it become that in March the Commissioners were obliged to resign. However, in the topsy-turvy world of the European Commission, resigning means staying in office, continuing to draw salaries and continuing to take decisions—125 decisions affecting the lives of 300 million people across Europe since March—and pretending that nothing has happened.
The responsibility for this lamentable state of affairs rests fairly and squarely with the Council of Ministers, with the Governments of Europe. They should have immediately declared their readiness to appoint new Commissioners to make the resignations effective and it is not too late for them to do it at Cologne.
The Governments of Europe should also be pressing for radical reform. My right hon. Friend the Leader of the Opposition has proposed a comprehensive agenda for reform, including the establishment of a truly independent fraud office outside, not inside, the Commission.

The Foreign Secretary was unconvincing in dodging the question from the hon. Member for Falkirk, East (Mr. Connarty) on that simple point.
How can we expect serious reform from Ministers from a party whose leader in the European Parliament—Pauline Green, the leader of the European socialists—was singled out for criticism by Paul van Buitenen, the whistleblowing official suspended from his post by the Commission? How can we expect reform from a party whose Members of the European Parliament have refused to censure or dismiss a single Commissioner throughout the crisis? Labour MEPs put down a motion of censure on the Commission in the European Parliament, then withdrew it as soon as it looked as though it was going to be passed. The party's sole aim has been to protect its own, to save its face and to whitewash fraud.
The fundamental lesson arising from Europe's recent crisis is that Europe has been doing too much and doing it badly. At Cologne, Europe's leaders should discuss how the European Union could do less, but do it better, not least so that significant reductions can be made in the size of the European budget. They should also discuss enlargement. The Foreign Secretary's memorandum to the Foreign Affairs Committee last week did not mention enlargement, except in the context of qualified majority voting. We have consistently called for enlargement to be a priority for the EU. This is an historic opportunity to advance the principles for which Europe should stand: free trade, free markets, deregulation and co-operation. The timetable has been delayed as a result of Europe's failure to recognise the need to change itself, to make its procedures more flexible and to cut costs.
Perhaps when she winds up the Minister will make it clear whether she agrees with our proposal, made as part of our drive to increase flexibility in Europe, to give applicant countries the opportunity of a partial derogation from the acquis communautaire. Will she also clarify the effect that recent events in the Balkans will have on the accession timetable for countries such as Bulgaria and Romania, which are not included in the first wave?
We can tell that an election is imminent, because the Prime Minister has let his hitherto latent Euro-scepticism become known to the tabloids. Even for a Government driven by spin doctors, the tactic of repeatedly saying one thing while doing another must be nearing the end of its useful life. We have seen it all before. The House and the country should be fully aware of which Prime Minister will be travelling to Cologne. It will not be the Prime Minister who assured readers of The Sun just before the general election of his love for the pound, but the one who, shortly afterwards, committed his Government to abolishing the pound at the earliest opportunity. It will not be the Prime Minister who told British business men that Europe needed to deregulate, but the Prime Minister who then signed up to a European socialist manifesto calling for more regulation. It will not be the Prime Minister who, simply because there is an election coming, pretends that he does not want to bounce Britain into the euro, but the Prime Minister who travels to Aachen to receive a prize for promoting European integration, lamenting the attitude of this nation. We have got used to the Prime Minister and his Government saying one thing in Britain and doing another in Europe. It will not work any more.
At Cologne, Britain needs a Government who will put the case for a more flexible and more outward-looking Europe that deregulates more and interferes less—


in short, a Europe in line with the mainstream views of the British people. That would be a positive vision for the future of Europe. It is the vision held by the Conservative party. The crucial difference between the Government and the Opposition is that the Labour party cannot grasp the fact that it is possible to be constructive about Europe and in Europe without conceding vital British interests. When the Conservative party co-operates with our sister parties in Europe, we do so without signing up to manifestos with which we disagree and without abandoning all vestige of principle. When we publish a joint statement with our centre-right colleagues we do so as well as, not instead of, giving firm pledges to the British people. Unlike Labour's, Conservative policies are made in Britain for Britain.
This is the first British election of any kind during which a major political party has not fought the election on a British manifesto. Instead, the Labour party has handed out the manifesto of the Party of European Socialists. The name Labour party is nowhere to be found in that document. Alas, that is the party that will represent Britain in Cologne. When it travels to the continent, it does so not to work for British interests, but to receive its instructions.
I have one question, which I hope that the Minister of State will answer when she winds up. Given that the manifesto of the Party of European Socialists is the platform on which her party is standing, would not it be more honest for their candidates to describe themselves on the ballot paper as representing the Party of European Socialists? After all, that is what they are asking people to vote for on 10 June.

Mr. Mike Gapes: Will the right hon. and learned Gentleman confirm that the xenophobic policy that he is now putting forward, and on which his party fought the general election, led to a humiliating electoral defeat for the Conservative party? Is he looking forward to repeating that on 10 June?

Mr. Howard: I am certainly looking forward to the results on 10 June and I suggest that the hon. Gentleman holds his fire until we have seen them.
The Government's approach to the vital questions facing Europe is a million miles away from the mainstream views of the British public. To coin a phrase, it is time for a change in Europe. That change will never come from Labour, and the Liberal Democrats have given up all pretence of defending Britain's interests. Only the Conservatives believe that Britain should be in Europe, not run by Europe. Only the Conservatives will work for the kind of Europe that the British people want.

Dr. Godman: The right hon. and learned Gentleman does not even speak as a representative of a British party.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman should not interrupt the debate from a sedentary position.

Ms Rosie Winterton: I am grateful for the opportunity to speak in this debate, because I wish to address what my right hon. Friend the Foreign Secretary called the people's Europe and the role

that the European Union has played in economic regeneration and in creating jobs, especially in the area that I represent. It may be helpful to give some background information about my constituency and South Yorkshire.
Some 30 years ago, the South Yorkshire economy was thriving and the heavy industries of steel and coal were buoyant. Tool and railway engineering companies were large employers and unemployment was well below the national average, while male wages were well above. Indeed, they were among the highest in the country. However, over the past 30 years those traditional industries have collapsed.
In 1984, South Yorkshire had 29 working collieries, which employed more than 30,000 people. In 1998, there were only three collieries, which employed 820 people. That is the scale of the reduction. Between 1977 and 1995, the number of industrial jobs fell by 60 per cent and more than 177,000 jobs were lost. It is true that some 46,500 jobs were created in service industries, but overall the total work force was reduced by a quarter. A total of 132,000 jobs were lost.
In 1997, unemployment in South Yorkshire was 10 per cent., compared with a national average of 7.1 per cent. The effect on local communities is enormous. Many people are surprised that this once-thriving area now qualifies for objective 1 status, but it does: the effect of unemployment has been devastating.
I have a letter from Nigel Pattinson, the head teacher of Armthorpe school in my constituency. The school recently made a promotional video to highlight the school's successes and the achievements of its pupils. It was shown to sixth formers, and Mr. Pattinson writes that, afterwards, one of them said:
We're only kids from a pit village, you know. You seem to expect us to do better than we're meant to.
The head teacher adds:
I can't tell you what I feel about this … and how damaging it is to these youngsters in reaching their potential.
That shows the scale of the devastation suffered by such communities. However, membership of the European Union has allowed South Yorkshire to access funds and establish projects that try to tackle the real problems created by mass unemployment and reverse the climate of despair that goes hand in hand with it.
Yet much of what has been achieved has been accomplished despite the opposition of the previous Conservative Administration. They refused to introduce any special domestic programmes to help coal mining regions during the main pit closure period after 1984. Europe, on the other hand, listened to our problems and set up the RECHAR programme in 1989. However, even after that programme was established, the Tories tried to prevent the benefits that it brought from reaching mining areas by trying to claw back, from local authorities, the funding that was made available.
The European Commission, lead by Commissioner Bruce Milian, backed the mining areas against the Tory Government, and threatened to block all EU spending unless the Government changed the rules. Eventually, the Tory Government had to back down and European funding became genuinely additional.
However, making the European Union real to people is a big task. We need to make them understand what European funding has done towards meeting their needs.


People in South Yorkshire want to know what Europe is doing for them in terms of providing jobs, because that is what they are interested in. I shall give some specific examples of how European funding has directly benefited people in my area.
Between them, the Lakeside development project in central Doncaster and the Junction 4 employment project in Armthorpe in Doncaster have received almost £7 million from the European regional development fund. They are expected to generate more than 8,500 jobs. Local companies have benefited from the Doncaster technology centre, and more than £200,000 in European funding has been received. Companies such as Noel Village (Steel Founder) are accessing, through the export challenge programme, western European countries for export markets. Young people are being trained through a foyer scheme that received more than £0.5 million in funding from Europe.
Crime is being reduced through a CCTV scheme in the town centre, for which £200,000 has been received from Europe. The Doncaster College for the Deaf, a great project, received £93,000 to support residential students and promote interviewing, teamwork and personal skills, thus helping people with disabilities to get into work and live independently. In Armthorpe, European funding helped to set up a community centre, providing a focus for a community that had been devastated by pit closures. Since 1991, Doncaster alone has received £38 million in European structural funds.
Looking towards the future, we have the prospect of funding from the objective 1 programme. Approximately £90 million a year will be available over six years. It is vital that funding is used to meet the needs of local people. My right hon. Friend the Foreign Secretary referred to a people's Europe, driven by people and responsive to their needs. People set the priorities, and consultation must be thorough and systematic.
I can recommend a consultation method used in Armthorpe. Instead of simply publishing a questionnaire in the local paper and hoping that people would fill it in, Armthorpe community enterprise, locally known as ACE, joined with Armthorpe school to involve pupils in saying what would improve their job prospects and the quality of life in the community. That resulted in much greater participation than ever before, creating a real sense of involvement in the use of vital European funds among local people, particularly the young.
The results of the consultation will be published soon, and I invite my right hon. Friends the Foreign Secretary and the Minister of State to come to Armthorpe to see the results. They would be able to see what happens in practice when we go down to a lower level to involve local people.

Mr. Denis MacShane: They could see the great brass bands, too.

Ms Winterton: And the great brass bands.

Mr. Robin Cook: They could go on a race day.

Ms Winterton: Indeed; the attractions are mounting by the minute.
Matched funding is vital to the success of the objective 1 programme.

Miss McIntosh: The hon. Lady is giving us a picturesque overview, and she will be aware that North Yorkshire is not a million miles from South Yorkshire. Some of my constituents have benefited substantially from EU funds in the past, particularly 5b funds and the Konver programme. The farming community is in a time of crisis. I hope that the hon. Lady will also plead the case for North Yorkshire with her Front-Bench colleagues so that the whole of Yorkshire can be happy.

Ms Winterton: The hon. Lady is well capable of pleading her own case, but lifting the beef ban is one thing that will make people happier.
The Government, in contrast to the previous Administration, are already preparing so that areas such as South Yorkshire will be able to receive the full benefit of objective 1 funding. With matched funding, the establishment of the coalfields enterprise fund and the coalfields regeneration trust has shown the Government's willingness to ensure that we can use the maximum available resources from objective 1 funding, and assurances have been given about, for example, the single regeneration budget.
Membership of the EU has brought many benefits to the area that I represent. The Government are showing how a positive attitude to Europe, leadership and a willingness to encourage participation in all areas can make a real difference to people's lives. As Linda McAvan, the Member of the European Parliament for my area, said recently, European Union funding means that our coalfields are turning the corner and much-needed new jobs are coming to our area and improving our communities. That is the way in which we can increase people's confidence and self-esteem.
I hope that we will no longer have a situation in which young people in the areas to which I referred say, "We're just from a pit village. Don't expect much from us." The Government are showing how we can change that view and the European Union is helping us to do it.

Mr. David Heath: It is a pleasure to follow the hon. Member for Doncaster, Central (Ms Winterton), who gave us a charming view of the local perspective of Europe in her constituency. As an inveterate supporter of Somerset county cricket club, hon. Members may imagine my dismay at hearing Yorkshire people falling out among themselves as to their objectives.
This is a useful and important opportunity to air concerns before the European Council. I recall the similar debate before the Vienna Council six months ago, when some of the perspectives were rather different. For example, not one speech went by without a mention of Oskar Lafontaine, who seems to have virtually disappeared from our radar screens.
Some issues are still current. Tax harmonisation and its discussion has been touched on today. It is important to reiterate the view that however much tax harmonisation may be advocated from those on some Benches in the case of lorry fuel duty, it is not something that we Liberal Democrats advocate. We believe that that is the one area of flexibility available to national Governments within the


strict financial controls of the Maastricht treaty. It is an area in which subsidiarity is important and decisions are best made at the national level. We think that tax competition is a beneficial device in determining national economic performance and policies.
For all those reasons, we dismiss the view that tax regularisation should never be discussed. That is nonsense. It may well be in the British interests to consider ways in which we can come to a similar view about taxation levels. At the same time, using the veto where it is necessary to protect British interests is also an important issue. We shall study carefully the decisions taken at the Economic and Finance Council. I hope that the Chancellor will be able to make a statement at a later date about precisely what has been decided.

The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): I am grateful to the hon. Gentleman for giving way because that allows me to put on record that the withholding tax was not agreed today in ECOFIN. The council agreed to submit a report to the Cologne Council, highlighting our concerns about the eurobond market. Indeed, the Chancellor has promised ECOFIN a report in June on our position and difficulties with aspects of the proposed directive.

Mr. Heath: I am most grateful to the right hon. Lady for assisting us with that information. No doubt, those are the rather amorphous clauses to which one hon. Member referred. We must look in detail at that decision.
Kosovo was an afterthought in my comments of 3 December, but it is at the forefront of our discussions today. I am grateful to the Foreign Secretary for what he told us about the present situation, although the House may have to be further informed before the break for our recess on the rapidly changing situation, which involves the accumulation of troops. As the right hon. Gentleman would expect, Liberal Democrat Members very much welcome the fact that a decision appears to have been taken at least to provide the option of a peacemaking rather than a peacekeeping force through the accumulation of troops. The window for that to take place was narrow. If that option is what the Foreign Secretary has brought back from Washington, I welcome it.
I must repeat the question that I put to the Foreign Secretary at last week's sitting of the Select Committee on Foreign Affairs, which he was good enough to attend. A stark choice faces NATO in the execution of the war. Two options would remove the need for that choice. The first is the capitulation of Milosevic, which is devoutly to be wished and of which there are some signs in the information emerging from Serbia about a weakening of his position, both politically and militarily. However, that is by no means definite. The second is that we make an open-ended commitment to an attritional bombing campaign. I do not believe that that is acceptable or sustainable. If we set aside those options, the choice boils down to two alternatives. First, we could use ground troops effectively in sufficient numbers to finish the job that we have started. I do not dismiss for one moment the substantial logistical and strategic problems with that course. Secondly, we could maintain the line that NATO appears to have adopted hitherto, that we will not use ground troops except in an entirely permissive situation. The natural corollary of that is that we accept a negotiated settlement.
I ask the Minister to confirm again the point that I made to the Foreign Secretary. If there were a negotiated settlement as part of the endgame, apart from the conditions that are already clearly laid down as the objectives of the campaign, will the territorial integrity of Kosovo be maintained? By that I mean that there will be no partition by negotiation and no de facto partition arising from a partial withdrawal of Serbian forces or a zonal deployment of international forces that created a Slavic zone in the Kosovo province. Will she confirm that there can be no question of immunity for Milosevic or the key players in Serbia from prosecution by the International War Crimes Tribunal? Will she confirm that whatever solution emerges must be, because it would be a failure if it were not, acceptable to the refugees congregating in the front-line states?
I hope that there will be an opportunity at Cologne to consider further the support that this country and the European Union can give to the front-line states. I have often reiterated my concern about the position in Montenegro. I welcome the fact that the Foreign Secretary is due to meet Mr. Djukanovic tomorrow.

Mr. Robin Cook: Today, and in about five minutes.

Mr. Heath: In that case, I must make my point quickly. The position adopted by the Government of Montenegro has been heroic. They have a very large number of refugees on their soil without the obvious means of support that have been provided to other countries. We must do all that we can to ensure the protection of Montenegro's Government and people, and when the war is over, we must provide them with the support that they need to rebuild their economy. The same applies to Albania, Macedonia and to that most unlikely recipient of refugees, Bosnia-Herzegovina. It has not been much reported that the Bosnians have 21,500 refugees on their soil. Few European countries can be less able to meet that economic burden.
A major objective of our diplomatic effort in the near future must be to provide support for all the Balkan countries to create stability. The Royaumont process is one way of doing that but we need to go much further with a stability pact. We also need to consider the countries of the Caucasus and central Asia, which have taken a positive view of what NATO has done and put vital pressure on Russia.
In considering the consequences of the Kosovan situation, we must re-examine the European defence and security dimension. As might be expected, I agree with my right hon. Friend the Member for Yeovil (Mr. Ashdown) when he says that the European Union is a political heavyweight but a military lightweight. The Cologne summit may be the first opportunity to make the point forcefully to our European partners that they must share to a greater extent the burden of European security and make the contribution that is essential if the European dimension is to be a reality.
That does not mean a common European army, and I do not see why it should be interpreted as meaning that. It means that a European dimension must be firmly embedded in NATO. That is what every member of NATO, including America, wishes, but we must act to make the early steps taken at St. Malo a reality. That might include a Europe-wide defence review. It certainly must mean closer


co-operation on procurement and development, and—something dear to the Foreign Office—stronger controls on arms sales.
If development of a common foreign and security policy is coupled with the enlarged European Union, which I think is critical to the future security of the European continent, that, by its nature, redefines the relationship with Russia. No hon. Member needs reminding that Russia has gone through a difficult political period, not least in the past few weeks. There was a risk that Russia would be rudderless this week. Happily, that is not the case. There is still a President, Government and Duma.

Dr. Godman: Is the hon. Gentleman aware of the lively debates on a European defence review in the neutral states, such as Sweden, Finland and the Irish Republic? I think that the Taoiseach and the Government of the Irish Republic are anxious to sign up for the "Partnership for Peace" initiative, and similar debates are taking place in the other two neutral states.

Mr. Heath: The hon. Gentleman is right. It is interesting that from several different directions there is a view that we must get the principle of European security right and that we cannot simply rely on the Americans, although we welcome and depend on our friendship and alliance with them and the other transatlantic forces. The CFSP will be effective only if it engages positively and carefully with Russia. We must recognise that as an EU priority in the months ahead. That should include not only Russia but Ukraine, which is often forgotten, and, if possible, Belarus.
The middle east has not yet been mentioned but I hope that it will be a key issue at Cologne. Hon. Members on both sides of the House have warmly welcomed the election of Ehud Barak in Israel. We should also greet that election with realism, because it was largely a referendum on the popularity of Binyamin Netanyahu rather than on the prospects for the peace process and the steps that need to be taken. Nor should we underestimate the difficulty of forming a united Government in Israel, let alone establishing a consensus on the way forward in the peace process. The difficulties are formidable and they will need our assistance. Let us not leave it to the Americans to be the only brokers of that peace; let the European Union take a real initiative.

Mrs. Louise Ellman: Does the hon. Gentleman agree that the form of the Government of Israel is a matter for the people of Israel and will largely be the product of their electoral system? Does he agree that while it is right that the European Union and others do their utmost to secure peace on the basis of Oslo and the Wye accords, it is ultimately a matter for negotiation between the Palestinian people and the Israeli Government?

Mr. Heath: Of course, the Government of Israel is a matter for the Israeli people. I should not dream of intervening in that process. However, this country and other member states of the European Union may have a part to play in forwarding the peace process—as the Berlin declaration set out. I hope that we can build on that

and that, where we can provide support for that process and for the process of international law, we shall do so. The middle east is an important part of the world; it is of critical strategic importance. It is an area in which many people in this country have a real interest.
In relation to what are unflatteringly described as the Amsterdam leftovers, there are rather a lot of them. Given that the Amsterdam summit was rather a jejune feast at the best of times, it is rather perverse that the leftovers seem more extensive than what was agreed. However, we must now make significant progress. There is a great imperative for reform, not least in the matter of the Commission and the way in which the EU does its business. Liberal Democrat Members want to see the reform of politics in Europe, exactly as we want to see the reform of politics in Britain. It is the same process, but it takes place at different levels. Our objectives are consistent.
The wastefulness and mismanagement in the EU which were highlighted by the Court of Auditors report represent an open sore in the relationship between the EU and its member states. My party and I believe that there can be no compromise on corruption, no weakness on waste and no respite on reform. The episode that took place early this year has shown us a European Parliament that is beginning to grow in stature. However, having said that, the Parliament remains incoherent in its response to what happened. The socialist group defended the indefensible—cuddling up to Jacques Santer when it should have treated him with a great deal of care in relation to his defence of the European Commission. We also saw that Conservative Members of the European Parliament were unable to unite either to give support to Mr. Santer, who is a putative colleague on their Benches—I believe that he will be sitting with the Conservatives in the next European Parliament—or to disown him. That lack of ability to take coherent action was signposted by that admirable fellow Pat Cox in his proposals to name and shame the Commissioners who had been criticised. In effect, the European Parliament ducked the challenge. It has continued to do so in its reaction to matters such as the statute and the expenses. The Parliament is allowing the impression to be given that it is wedded to unacceptable practices that no Member of this House would want to defend.

Miss McIntosh: rose—

Mr. Heath: Perhaps one Member wants to do so. I give way to the hon. Member for Vale of York (Miss McIntosh).

Miss McIntosh: I should be interested in the hon. Gentleman's views on why the leader of the socialists in the European Parliament tabled a motion calling for the sacking of all the Commissioners and then—as my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) pointed out—withdrew it as soon as it looked as if it would be adopted. Does the hon. Gentleman agree that that is extremely odd behaviour?

Mr. Heath: I agree. That behaviour was shameful. The measure was an artifice, designed to try to buy time for the Commission in an unacceptable way. I find it equally unacceptable that the group of which the hon. Lady is a member was able to split three ways over the same issue,


but that is another matter. The fact is that there was a need for the European Parliament to take a lead. I point out to the Minister of State that the fact that Mrs. Edith Cresson is still in post is preposterous, as many people outside the processes of the Parliament agree.
We need a new intergovernmental conference—there is a great deal for it to do. Its work will not lie merely in salvaging the fudge over the reform of the common agricultural policy, which is unsustainable in its current form. As a representative of a dairy farming area, the dairy farming agreement will not be sustained any further than the next meeting of the World Trade Organisation—the agreement will not pass the necessary tests. The policy is not the right recipe for allowing enlargement; that is a serious problem.
We also need some serious institutional reform to prepare the EU for the next decade and beyond. We need to entrench the diversity and decentralisation that many Members of this House want to see. We need the completion of the single market. When the updated league table is produced, it will be interesting to see whether it is similar to the one produced at the last juncture at the end of 1997, when only 70 per cent. of the relevant legislation had been implemented nationally. At that time, the United Kingdom was one of only five states to have implemented 95 per cent. or more of international market legislation. Will the rest of the states catch up? Will the single market be a reality?
We need to find a way to codify properly the principle of subsidiarity that is so important if we are to bring power down to the lowest level. We must be clear that what can be done locally and regionally will be done locally and regionally, that what has to be done nationally is done nationally and that only what must be done at a European level is carried out at that level.
We hold this debate in the shadow of the European elections. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) indulged himself with a little low-intensity electioneering. I was disappointed; in the past, he has been more robust, but perhaps he is looking forward to his additional hours of leisure during the next few months. Today, I did not think that he was running on all four cylinders in his electioneering function. Alternatively, it might have been because he represents only a fraction of the Conservative party and he was unable to unite all its members.
There were 18 years of Conservative Government; we know what that did for our status and our position in Europe. We know the result of Conservative non-engagement. There is a vice of which I was sometimes accused when I used to play rugby.

Mr. Stephen Pound: I hope the hon. Gentleman did not enjoy a line-out with Lawrence Dallaglio.

Mr. Heath: The hon. Gentleman is very quick. I left him that opening and he filled it.
In rugby, members of the pack are sometimes accused of flanking—hanging around at the side of the pack, hoping to do something flashy to please the crowd, but not providing any useful support to the rest of the team. When the Conservatives were in government, they had a record of flanking on Europe. The alternative is to get stuck in. It is time that we got stuck into Europe; only by

being fully engaged can we bring about the reforms that are needed. I hope that Members of the new European Parliament—from whichever party they come under the new system—will get stuck in. I also hope that the Labour Government will do so.
The Government show a strange reticence; they know that they should make progress over Europe, but they oscillate from one side to the other. They oscillate from Mr. Murdoch to the focus groups. They are so busy oscillating that we end up with a quivering mess in the middle of the road; that does not provide the progress and leadership in Europe that we need. If we are serious about creating a more successful Europe, in terms of its structure and economy and the way in which its citizens perceive the EU, we must create a Europe that is more decentralised, democratic and diverse. That is a genuine agenda for Cologne. I hope that the Minister who replies to the debate will be able to convince me that the Government share the Liberal Democrat objective of making that agenda a reality in the months to come.

Mr. Francis Maude: On a point of order, Mr. Deputy Speaker. Have you received a request from a Treasury Minister to make an urgent statement to the House about developments at the ECOFIN Council in Brussels, which the Chancellor of the Exchequer is attending today? There is evidence that those developments go directly against what the Chancellor told the House only 10 days ago. On that occasion, he made it clear that:
the United Kingdom will not accept any directive that requires member states to introduce a withholding tax.
He said that twice. Later, he stated:
the UK will not accept any directive that requires members to introduce and impose a withholding tax."—[0fficial Report, 13 May 1999; Vol. 331, c. 405.]
The Chancellor gave a clear commitment that the United Kingdom Government would veto any directive that imposed a withholding tax. It is now clear from the conclusions reached at ECOFIN that that is simply not the case. The United Kingdom Government have committed themselves to submitting a technical paper on the exemption of one part of the market from that directive. This is a matter of great importance. Thousands of jobs in the financial services industry are at risk and people need to know what is happening.

Mr. Deputy Speaker: Order. I think I have got the sense of the right hon. Gentleman's point of order, which is developing into a speech. I have not received a request from the Government to make a statement about that matter—although they are able to do so at any time. The Minister who will reply to this debate may be of a mind to refer to that issue later.

Mr. John Cryer: I was interested to hear the hon. Member for Somerton and Frome (Mr. Heath) talk about decentralisation and the European Union. His comments seem to be at odds with the direction in which the European Union and the European Commission have been moving in the past 20 or 30 years. For instance, what does decentralisation have to do with the treaty of Maastricht and the concentration of real economic and political power in fewer and fewer hands?
I am always fascinated to hear Conservative Members such as the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) refer to the abandonment of the veto. The single greatest abandonment of the veto occurred in 1985 when the Conservatives pushed the Single European Act through Parliament. Some serving Members of Parliament helped to push that legislation through: it was Mrs. Thatcher's great stand against the Brussels juggernaut.
I have always believed that the Conservative party managed to secure the worst of all possible worlds in its policy towards the European Union. The Conservatives managed to wrap themselves in the union jack at home—playing an appallingly nationalistic card that was entirely counterproductive. They then went to Brussels, Strasbourg or wherever and lay down and died in front of any treaty that was foisted upon them.
The United Kingdom joined the European Community in 1972 without any mandate from the British people. It was a Labour Government who held a referendum in 1975. We then had the Single European Act 1985, the common fisheries policy and the common agricultural policy. Finally, we witnessed that great victory for Conservatism: the Maastricht treaty, which was signed by the right hon. Member for Horsham (Mr. Maude), the shadow Chancellor. It is a shame that he is not in his place at present. If he is to respond to the debate later, I look forward to his sharing with us his special thoughts about how it feels to have been the British politician who put his name to the Maastricht treaty. He has never given us his views on that subject. [Interruption.] The hon. Member for Chesham and Amersham (Mrs. Gillan) may whinge from a sedentary position, but the fact is that the right hon. Gentleman put his name to the Maastricht treaty and has done nothing since then but criticise it. I would dearly love to know why he signed that treaty in 1992.

Mrs. Cheryl Gillan: I was not whingeing from a sedentary position; I was simply remarking how ill informed the hon. Gentleman is. If he thinks that my right hon. Friend the Member for Horsham (Mr. Maude) is to make the winding-up speech for the Opposition, he is obviously in the wrong debate.

Mr. Cryer: In that case, why was the right hon. Gentleman in the Chamber earlier? He seemed to be making some notes—but there we are. Perhaps he will share his thoughts with us on another occasion. I look forward to that immensely.
Returning to the European Union—after that irrelevant intervention—I have always opposed the single European currency. I have made that clear both inside and outside this place. It is not because I am a little Englander—unlike many Conservative Members—or because I am a nationalist. I oppose the single European currency because I am an internationalist and I think it would be dangerous for people in Italy, France and Germany, as well as for working people and the democratic institutions of this country.
My objections to the single European currency are not economic—although plenty of criticisms may be levelled in that regard—but essentially political. The single European currency is basically a political project about

the creation of a European super-state. The pro-Maastricht campaigners on the continent are quite open about that. They have always been Euro-federalists; it is only in this country that there is some equivocation among EU supporters about political integration.
I have always wondered why the supporters of Maastricht are so enthusiastic about transferring power from elected institutions to unelected bankers sitting in Frankfurt or Bonn who are accountable to absolutely no one. Why is it such a great victory for the democratic process that power over interest rates should be concentrated in the hands of a few unelected, unaccountable people sitting in a board room somewhere?
I will give hon. Members an example of the European Union's unaccountability. Before the launch of the euro at the beginning of the year, I saw an interview with the President of the European central bank, Mr. Duisenberg. When asked exactly what would be revealed about the decisions made by the board of the European central bank, he replied that the voting patterns of individual board members would not be disclosed as that would leave them vulnerable to pressure in their countries of origin. That is what democratic accountability is about: exposing oneself to pressure.
Our constituents may ask us to vote a particular way on a particular issue and to make a particular representation. At my last surgery, a constituent asked me to support the death penalty. I had to be honest and said that I would not support the death penalty in a million years. That constituent must now decide whether he will support me at the next general election. The bankers on the board of the European central bank will not be in that position; they will not be exposed to any public hostility or approbation.
As to democratic accountability generally across the European Union, I am absolutely convinced—this is a fairly obvious point—that the small, closed, rich, white shop, which is what the EU has always been, has led to the abuses of power and the corruption that we have witnessed in recent months. It has led also to the European Union's treatment of poor third world countries, which I can only describe as imperialistic. I refer my right hon. Friend the Minister to the report by the International Development Committee entitled " The Future of the EC Development Budget". In its conclusion, the Committee states:
Recent fraud allegations have undermined the reputation of the European Commission. This report tells the story of an external assistance budget, unfocused, uncoordinated, ineffectively implemented and—to use the words of the Secretary of State—`skewed quite dreadfully against the poorest'".
That is the record of the European Union in the third world viewed against the backdrop of its attempts to push poor third world countries into deeply disadvantageous and exploitative trade agreements with western EU countries in order to allow multinationals and big banks to exploit those third world countries more effectively. So much is revealed in a previous report by the International Development Committee about the Lomé convention.
Yet the European Union has somehow managed to maintain with some sections of the population a nice, cuddly, liberal image. The EU has perpetuated the myth that it is terribly nice to people, whereas it has behaved absolutely appallingly towards some of the poorest countries in the third world.
As to accountability, I would be interested to know the Government's intentions on the proposed referendum on the single European currency. To what extent are the Government prepared to support the recommendations of the Neill report about future referendums? Will the Government remain neutral in a referendum, as recommended in the report, or will they follow the line taken by the Labour Government in 1975? That was a perfectly honourable position, but it would be interesting to know which position the Government will take.
Hon. Members may remember—I was only 11 at the time, but I clearly remember it—that in 1975 the Wilson Government issued a document called "Britain's New Deal in Europe", which declared that the Government supported Britain's membership of the Common Market because we would retain a veto over all decisions that we did not like, and because there would never be an exchange rate mechanism, which would be a threat to jobs. Both those points now seem pretty ironic after Black Wednesday in 1992 and the Single European Act of 1985.
Will Ministers be allowed to voice their independent opinions during a referendum, as in 1975, or will they be expected to abide by the principle of collective responsibility?
I turn now to the European Union's spending on propaganda to promote the single currency. On 8 February, I wrote to the head of office at the European Parliament office in Queen Anne's Gate to ask questions about the spending of EU money—after all, it is our money because it comes from our taxpayers—on the promotion of the European Union and the single European currency. In that letter, I asked:
What was the expenditure last year, and how much will be spent this year, in the UK by the European Parliament on promoting the European Union on mobile information units or exhibitions?
Hon. Members will be aware that trailers are touring the country, distributing pro-single currency information left, right and centre, outside schools and elsewhere. No information or propaganda about the other side of the argument is being distributed.
Secondly, I asked:
How much money did the UK office of the European Parliament provide last year to support the European Movement in its programme of seminars and events and how much is expected to be provided this year?
That was on 8 February, and so far I have not received a reply from the office of the European Parliament. That is how much it seems to care about accountability. When a British MP writes to it for a few simple explanations of how it distributes its funds, what answer does he get? Absolutely none. I must say that it comes as no great surprise.
Will my right hon. Friend tell the House whether a White or Green paper or a consultation paper will be issued in the run-up to a referendum to explain to people objectively and dispassionately the pros and cons of the single currency? That is important, and the publication of such a paper would again repeat the events of the 1970s, when the Wilson Government issued a paper to explain the pros and cons of membership of what was then the European Common Market.
I turn now to tax harmonisation. If we go along with a single currency, the next step will be tax harmonisation; there is no alternative to that and it is an exercise in mendacity to pretend otherwise. There have already been

extensive discussions about that under the auspices of ECOFIN. There have been no discussions about, for example, the harmonisation of income tax, but there are no guarantees that it will not be debated under the auspices of ECOFIN in future.

Ms Diane Abbott: My hon. Friend will be aware that the Maastricht treaty—which 1 voted against because I read it from cover to cover—explicitly refers not only to monetary policy but to the need to harmonise fiscal policy. It is, as he said, an exercise in mendacity to pretend otherwise.

Mr. Cryer: My hon. Friend makes a good point. Anyone who has any doubts about the future direction of the European Union should read the Maastricht treaty. It is one of the biggest streams of right-wing monetarist poison that I have ever laid eyes on, which is why the previous Conservative Administration were successful in putting it through Parliament.
Can those who support the single European currency and try to argue that there will not be a move towards tax harmonisation say whether there is, anywhere in the world, a single currency but no single, central tax-gathering mechanism? Such a place does not exist, and any suggestion to the contrary does not hold water.
We are already experiencing cuts in regional funds. Objective 2 funds, for instance, will be spectacularly cut in the next year or two. Undoubtedly, one of the principal reasons for those cuts is that much greater funding is needed for the future single European currency. Any new currency requires enormous funds to create reserves, and funds must be moved around. That is why some of the structural funds are being withdrawn and money will be centred in the funds of the new single European currency.
With all due respect to my hon. Friend the Member for Doncaster, Central (Ms Winterton), we shall not gain the benefits that she has experienced in South Yorkshire and which she rightly welcomes. I come from Yorkshire, and the devastation of the mining areas is absolutely criminal; it was one of the greatest acts of political vandalism by the previous Government.

Dr. Godman: I intervene in case people from Northern Ireland are listening to the debate. I am not a defender of the European Union, but I point out to my hon. Friend that all EU member states have given a commitment to continue funding the peace initiative, which is so very important to the six counties and the Irish border counties.

Mr. Cryer: I thank my hon. Friend for that intervention. However, the withdrawal of funding from the structural funds will certainly intensify over the next years. I draw his attention to the McDougall report, which was recently released by the European Parliament. It says that the launch of any new currency requires enormous funding, equivalent to an income tax increase of several per cent. across the European Union. I do not hear many supporters of the single currency suggesting that we raise taxes by enormous margins to fund it.
There are one or two other matters to which I should like my right hon. Friend to refer in her wind-up speech. What progress has been made in reforming the common agricultural policy? That policy was another bequest that


the Labour Government made to a grateful nation in the 1970s. The CAP is swimming in corruption; for example, funds are diverted to non-existent projects.
Will my right hon. Friend comment on the general state of the European Commission? Like other hon. Members who have spoken, I am amazed that Edith Cresson is still in power when she is clearly guilty of, at the very least, nepotism and mishandling funds, and probably something a great deal more serious. I look forward to my right hon. Friend's response.

Mr. Stephen Dorrell: I enjoyed the speech of the hon. Member for Hornchurch (Mr. Cryer) on several levels. He referred at the beginning of his remarks to the fact that my right hon. Friend the Member for Horsham (Mr. Maude), the shadow Chancellor, was one of two Conservative Ministers who signed the Maastricht treaty. The hon. Gentleman has no reason to know that because of my right hon. Friend's interrupted service in the House, I assumed his responsibilities in the Treasury after the 1992 election and was the Treasury Minister responsible for taking the Maastricht treaty through the House. The hon. Gentleman said that he regarded the Maastricht treaty as the enshrinement of right-wing monetary discipline, and I am happy to accept that description of the treaty—it is one reason why I was happy to be the sponsoring Minister as the treaty went through the House in the early 1990s.
The hon. Gentleman made a number of points that touched a chord with me. He asked the Minister important questions about the terms under which a referendum would be held on British membership of the single currency, and I hope that the Minister will answer them directly. What the hon. Gentleman said about the developing world was interesting, and I shall return to that subject.
As the hon. Gentleman was speaking, I was reflecting on what I had in common with him on his approach to matters European. It is not a great secret that we do not have everything in common, but he and I are both wholly at ease with the histories of our respective parties in the development of the European argument through the 1970s and 1980s. He, I expect, is proud of the fact that his party's official line was to vote against British membership of the European Community in 1971. He, I expect, is proud of the fact that his party fought the 1983 general election on a commitment to withdraw from the European Union—a manifesto on which the present Prime Minister entered the House as a newly elected Member, which is an ironic reflection, in view of his new status as a Europhile leader.
I expect that the hon. Member for Hornchurch would have been pleased to vote against the Single European Act 1985, as well as the Maastricht treaty. I am proud of the fact that my party was responsible for taking Britain into the European Community, and I am proud of the fact that I voted for the Single European Act, and that I was one of the sponsoring Ministers for the Maastricht treaty as it went through the House.
One of the most depressing aspects of our present situation is that the whole argument about Europe is thought by some to be encapsulated in the argument about

monetary union. Those who are in favour of monetary union are thought therefore to be Europhile, whereas those who are suspicious or sceptical of monetary union are thought somehow to be Europhobic.
Even worse, those who are in favour of, or who at least leave open, the option of British membership of European monetary union in the future are said by some—I quote words that I have heard many times—to be "in favour of going in", whereas those who are anti-monetary union are said to be "in favour of leaving". Those phrases are redolent with memories of the 1975 referendum campaign, when many of us thought that, once and for all, we had decided the question whether Britain was an active member of the institutions of the European Union or whether we were outside.
I hope that it is possible to conduct an argument about the future shape of Europe without concentrating exclusively on the question of monetary union, but for the record, let me say that I am agnostic on the question of monetary union. When I was the sponsoring Minister for the Maastricht treaty, I made it clear that I did not believe that the continental project was well judged. I do not believe that it has been introduced in circumstances that are ideal from the point of view of those who have participated in the early stages of monetary union. However, I also believe that, given that the project has gone ahead, we should be clear about two things.
The first is that the countries that have introduced the new monetary union are Britain's major customers. It is, therefore, in Britain's interests for their project to be a success. It is a simple rule of economics that what is bad news for our customer is bad news for us. Because it is in this country's interest for our customers' economies to be successful, I wish them well in their project, and I recognise that it is in Britain's interests for the single currency project to succeed. That is the first thing that ought to be clear.
The second is that if, in the fullness of time, we in Britain are persuaded that the project is a success, it will be in our political interests to join. I do not believe that that is clear yet, but if and when it becomes clear, it would be in Britain's interest to join a successful single currency on the continent.
If we are not "ultra" on the question—not against the single currency in all circumstances, but not in favour of it now—that seems to be about all that we can say about the single currency and Britain's prospective membership of it. If we are not in either "ultra" camp, we have a choice: we can have an everlasting dress rehearsal of the arguments that we may one day use for or against Britain's membership of the single currency, or we can move on to deal with the other issues that are on the European agenda and which are of more immediate interest to Britain in 1999. I shall take the second course in the debate.
There is an urgent need to articulate a clear vision of the kind of Europe in which we want to live, and to demonstrate how that broad vision can be translated into reality. So often the European debate is defined by what a participant is against. We are told that particular individuals are anti-euro, anti-federalist or anti-bureaucratic. There seems to be an interminable gallery of music hall rogues who are held up for us to take pot shots at, in order to define our position by reference to what we are against.
Is it not high time to set out clearly what our objectives are—not what they are not, but what they are? What kind of institution do we want to support and join, and why do we support such an institution? I have a simple way of summarising the type of European institution in which I want Britain to be an active participant. It is summed up by saying that I am a supporter of the Europe that is defined in the treaties—not a Europe described by the commentators, or a Europe held out as a distant prospect by the dreamers, but simply a Europe that is defined in the treaties.
It sometimes serves us well to pause and reflect on what is set out in those documents. First, the European treaties as they have evolved since the treaty of Rome define a union of nation states. The great majority of political decisions within the member states of the European Union remain outside the ambit of all the European Union institutions—in my view, quite rightly. Even that part of political decision making that is within the European Union institutions is not all within the institution of the European Community. That was the purpose of the intergovernmental pillar that was introduced in the Maastricht treaty, part of which I sponsored.
Even in the decision-making aspects that are within the European Community's ambit, a substantial proportion of those subjects is reserved for decision by consensus—that is, by unanimity. Only a very small part of the political decisions affecting member states of the European Union is open for decision by qualified majority voting, and almost nothing by simple majority voting. It is worth restating the extent to which Europe remains—in my view, quite rightly—a Europe of nation states with very little decision-making power affecting those nation states available to be decided even by qualified majority voting.
Secondly, we need to underline the proposition that the Europe defined by the treaties is a Europe about which the hon. Member for Hornchurch was sceptical—rightly, from his point of view—because it is a Europe committed to liberal economics. I mean liberal economics as properly understood, not as often defined by the modern day Liberal party. The Europe of the treaties is a Europe of nation states that recognise that they have a common interest in the efficient creation of wealth. That requires an open single market with effective pro-competition policy, effective action against state aids that would distort that marketplace and a clear commitment to open, free trade with the rest of the world.
I am not seeking to impose my interpretation on the treaties; that is all set out in the treaty of Rome, as amended by the later treaties. It was a treaty, in a word, written by the liberals. That is why, as an economic liberal, I support it, and why I am not surprised that the hon. Gentleman does not. The treaties were written not by woolly-minded liberals of the modern variety, but by liberals of the tough-minded radical variety that has come more recently to be called Thatcherite. They recognised the need not only to set out a general ambition to achieve a free and open marketplace, but to police that marketplace and ensure that those disciplines were not merely embraced in general, but applied in the particular.
The European Commission was set up to enforce the disciplines signed up to in the treaty, and the European Court of Justice exists to ensure that the institutions use the powers accorded to them and set out in that treaty. That is why I am in favour of a strong Commission acting within the ambit of the powers set out in the treaty.

Many of my hon. Friends, and members of other parties as well, become concerned when institutions seek to use injudicious wording in treaties to develop powers that were not intended to be accorded to them at the time that those treaties were signed. The Europe defined in the treaty—one committed to liberal free trade with institutions to police those disciplines—is the Europe to which I remain as committed today as I was when I campaigned in the 1975 referendum.
Having set out that framework, we have to test the extent to which the Government are pursuing those ideas. Against that test, there are a large number of respects in which I find them wanting. First, and most obviously, I want to associate myself absolutely with the remarks of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) about the Prime Minister's initiative, which was set out at St. Malo, on a European defence identity. I simply do not see where a European defence identity comes within the ambit of the core range of activities set out in the treaties.
Of course I am not against co-operation between European countries on defence issues, but I believe strongly that there exists an institution designed for that purpose. It is called the North Atlantic Treaty Organisation. Why reinvent it? Furthermore, why reinvent it within an institution that does not have either the history or the institutions to support such an identity? NATO has both.
Defence co-operation within Europe is better done within NATO, partly because that involves the United States and partly because it allows us to build on more than 50 years of successful co-operation with partners in defence through NATO. Perhaps most importantly of all, I also believe that defence should be regarded as a NATO responsibility because the agenda of the liberal economic Europe that I have described is huge and neglected. The last thing that we should want is for Europe's institutions to be diverted into looking at defence issues when they should be getting on with the huge and neglected agenda on the liberalisation of the European economy.

Dr. Julian Lewis: I applaud the robust way in which my right hon. Friend is standing up for the role of NATO, but does he agree that a problem that our party faced in government is faced by the new Government? No sooner are people appointed President of the Commission than they proceed to outline a very different perspective on the defence of Europe—Mr. Santer did so originally and Mr. Prodi is doing so now—and announce straight away that they would like a common defence organisation, in which case this country could be outvoted in respect of its ability to defend itself by the other members of the European Union.

Mr. Dorrell: I also saw the remarks of Mr. Prodi and I have set out—with some clarity, I hope—why I disagree with them. Before Mr. Prodi referred to it, the Prime Minister was off to St. Malo talking about a European defence identity, but I would have hoped that, far from edging in such a direction, the Government would have drawn a distinction between defence, which is properly dealt with by NATO, and the huge agenda of liberalisation issues, which ought to be an urgent priority for handling through the European Community institutions.

Mr. Gapes: The right hon. Gentleman has referred to his commitment to the Maastricht treaty. Does not that


treaty talk in terms of a common defence policy that might, in time, lead to a common defence? Therefore, the Government's St. Malo declaration, which was made with the French and supported by the Germans, is entirely consistent with the Maastricht treaty, which he says he supports. Why does he have such a problem with it?

Mr. Dorrell: I am not saying that the declaration is inconsistent, or that it is illegitimate for the Government to pursue their ambition; I am simply saying that it is wrong. Let me articulate the set of priorities that are in the mainstream of the economic agenda and which I think ought to be handled through the European Community and the Brussels-based institutions.
First, and most obviously, the exclusion of central and eastern Europe from participation in the single market of the old western Europe is becoming a stain on the modern history of Europe. It is worth reflecting on the fact that, this autumn, it will be 10 years since the collapse of the Berlin wall, and we have made virtually no progress in the inclusion of the countries of central and eastern Europe as full members of the European Union.
We were told that the Berlin summit would be the opportunity to confront the questions faced by the current European Union and the implications of the extension of Europe to the east, but we all know—it is a matter of history—that the Berlin summit funked the main issues that were placed before it. That is the first test that the Government have failed.
The second test—never mind the people in central and eastern Europe who are excluded from the benefits of a successful liberal economy—applies to the 10 per cent. of the people who live in the current member states of the European Union who are excluded from the benefits of liberal economics because of high unemployment. It is not a mystery why those countries suffer from high unemployment. We can see from our own experience, and from that of the United States and New Zealand, which has been repeated all around the world, that there is a direct relationship between labour market flexibility and low unemployment.
In some moods, the Prime Minister likes to align himself with that argument, but, looking at what the Government do rather than at what they say, they are resolutely going in the wrong direction in terms of policy here in Britain and the initiatives that they support within the European Union. They introduced the social chapter as a basis for new regulation of our domestic labour market, despite the fact that we had negotiated a situation in which it did not apply to Britain. Now we are told that, within the European socialist agenda, they propose to develop a pact for employment, the purpose of which, whatever the Foreign Secretary said earlier, is made explicit. It is to introduce
agreed reductions in working time negotiated between the social partners".
Either the Labour party believes that reduced working time is part of the European social obligation and a necessary step towards the introduction of a socially just Europe, or it does not. It has put that proposal in its manifesto, but then says, "Oh no, it does not apply really." That is an unsatisfactory state of affairs, to put it politely, particularly because, elsewhere in that same manifesto,

there is a commitment to a stronger social chapter, which will make worse precisely the kind of regulation that is leading to high unemployment in parts of continental Europe and which needs to be put into reverse.
I think that not because I am against sharing the success of a successful liberal economy widely through the Community, but because I am in favour of that. Such regulation, wherever it has been used around the world, has undermined living standards and excluded less advantaged people from the benefits of a successful economy. It is something that we in this country should vehemently oppose.

Ms Rachel Squire: Does the right hon. Gentleman believe that the way for this country to compete successfully in Europe is to drive down pay and conditions of employment? Why has so much money from European structural funds had to come into this country to deal with the unemployment that was created by the previous Government, of whom he was one and who promoted the free market approach that he is espousing?

Mr. Dorrell: The hon. Lady should consult her pager. Her Government believe in liberal labour economics. All the rhetoric uses the language that I have just used. The hon. Lady's problem is that she looks at what the Government do and likes that, whereas Ministers hope that people will hear what they say and like that. The difficulty is not between the hon. Lady and me; it is between the hon. Lady and her colleagues on the Front Bench, who say one thing that she does not like and do another that, apparently, she does.
It is not just in the context of the labour market that the European socialist manifesto refers to steps in the direction of extra regulation. We see the same in its commitment
to avoid harmful tax competition".
We debated that issue in the House some months ago, and I do not propose to repeat everything that I said then. Let me simply reassert my belief that tax competition is one of the best available disciplines to limit the ambitions of the political parties, and that it should be made as vigorous as possible. I am suspicious of any party whose manifesto states that it wants to limit harmful tax competition.
Nor is this debate just about internal structures. The hon. Member for Hornchurch was right to say that, too often in the past, the European Union—like, it must be said, the United States—has been a protected market, excluding imports from the developing world. I believe that the EU remains damagingly protectionist, from the point of view of not only the developing world, but European countries themselves. While I cannot agree with much of what the hon. Gentleman said, I hope that we may make common cause on the desirability of a commitment within Europe to put Europe in the vanguard of the liberalisation of world trade, and promote the idea of new round of liberalisation talks.
Sir Leon Brittan has promoted the idea of a millennium round of tariff reduction talks. When I compare the benefit that such talks, if successful, could confer on mankind with all the meretricious trash surrounding the millennium that we are invited to welcome, I can think of no better celebration than the launching of a meaningful process of


reducing tariffs that have excluded most of mankind from the richest markets in the world for the larger part of the century.

Mr. Wells: Are not sugar and textiles two products that the EU could gainfully consider in its efforts to reduce its protectionism in relation to the third world? If it offered that, we might indeed get some liberal economics going throughout the world.

Mr. Dorrell: As my hon. Friend will know, if I am drawn into a discussion of textiles, I shall have to declare an interest. Let me put it on the record that I am a director and shareholder of a family textiles business. As it happens, however, I wholeheartedly agree with what my hon. Friend says about both textiles and sugar.
Last on the list of issues on which I test the Government's visions for Europe's future is what I regard as almost the crowning absurdity of the various European institutions that currently exist. I refer to the regional and structural funds. It is hard to imagine anything more absurd than European national Governments' agreeing a European Union budget 40 per cent. of which is devoted to such funds, given that, as we all know, any Minister—however senior—who took a similar domestic spending programme to the present Chancellor of the Exchequer would be shown out without an interview.
The regional and structural funds reflect ideas of regional development that were fashionable in this country in the 1960s. To read descriptions of the way in which they are used is to take a trip down memory lane. It is absurd that we should use money to distort the liberal market economy that is set out in the treaties, which we in Britain—especially in view of our recent history—should unambiguously support.

Mrs. Ellman: Is the right hon. Gentleman suggesting that the major structural funds that are currently bringing employment to Liverpool, regenerating the city centre and giving support and skills to people in local communities constitute money that is being wasted, and money that his party would not wish to be spent?

Mr. Dorrell: I am crystal clear about the fact that the regeneration of Liverpool that has begun over the past 15 years is overwhelmingly a result of local initiatives on the ground: initiatives on the part of local business, focused on the development of the community, the infrastructure and the environment. It is not a result of blanket regional development funds. If such funds were the answer to the problem of high regional unemployment, we would have cracked that problem in the 1950s. The history of regional development, not only in Britain, but in every developed country—in European countries such as Germany, France, Italy and Spain—is that domestic Treasuries have scaled down such policies, because they know that they do not work; yet they persist in Brussels, as a kind of international social security budget.

Mr. Alan W. Williams: Will the right hon. Gentleman give way?

Mr. Dorrell: No. I want to end my speech soon.
If the Government really want to stand four square for reform of Europe, the regional and structural funds are a natural target.
The Foreign Secretary has said that the Government favour European reform, and those of us who are pro-Europe can say amen to that. I agree with the Foreign Secretary that we need an ambitious programme of reform in Europe; the problem is that I do not think that the Government have shown the beginning of an understanding of what is necessary for the delivery of such a programme.
I believe that Europe—the 15 existing states of the EU, and the applicant countries to the east—can be the new tiger economy of the early part of the next century. The Prime Minister regularly tells us that he admires many aspects of the American economy; let him learn some of the lessons of that economy, and apply them in Europe. If he does that, he will unleash the most powerful and successful economy in the world.
The time for reform is now, as the Foreign Secretary rightly says. Unfortunately, that is a challenge that the Government have funked so far.

Mr. Mike Gapes: I want to change the focus of the debate slightly. First, however, let me say that it is unfortunate that the shadow Chancellor, the right hon. Member for Horsham (Mr. Maude), is not present. I understand that he tried to mislead the House by means of a point of order. I am afraid that the fact that Conservative Members do not even bother to stay to listen to a debate on which they have tried to intervene in such a fashion is a clear indication of the depths to which their party is sinking. As I understand it, the ECOFIN meeting had not agreed any directive relating to the withholding tax. No doubt the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Gateshead, East and Washington, West (Ms Quin), will say more about that when she winds up the debate, but, as I have said, it is a shame that the shadow Chancellor is not here. No doubt we shall not see him again today.
The Foreign Secretary spoke of the need for Europe to develop its own defence capability and capacity, and a number of the documents made available to us by the Vote Office deal with defence policy. This is not the occasion for us to debate Kosovo, the reasons for our involvement there or the lessons to be learned, but wider issues are at stake relating to discussions now proceeding in the European Union and NATO about the European strategic and defence identity, and the proposed dissolution of the Western European Union.
I am not entirely convinced that the issues have yet been fully thought through. I say that in the light of what is clearly a divergence of opinion within the EU, and between the United States and Russia, about the future of European security in its widest sense.
Recently, I came across a quote from a poem written in 1918 by a Russian poet, Aleksandr Blok. It says:
Russia is the Sphinx. Rejoicing and grieving,
And steeped in black blood,
She gazes, gazes, gazes at Europe,
Now in hatred, now with love!
The problem we face in Europe today is how to deal with Russia, which, despite its economic and political weakness, its bankruptcy and its governmental crises, is still a major, strategic nuclear power. I do not believe that


any future European security and defence identity can be shaped—and certainly cannot have secure borders to its east—unless we have a proper relationship with Russia.
President Clinton, speaking recently to American war veterans about Kosovo, made clear his belief in the importance of a Russian political and military presence in any solution to the conflict. I welcome that. At the same time, a member of his Administration, his ambassador Mr. Verschbow, talked about NATO enlargement and the Baltic states. Referring to the NATO Washington summit, the official American embassy press release of 13 May said:
He …'gave a very strong endorsement' to further enlargement. and noted that the Summit communique referred to Estonia, Latvia and Lithuania by name.
The interpretation of that statement in the three Baltic states and in Russia will be that the United States wants NATO enlargement to include those three Baltic states. That is all very well, but the Washington communique also referred to the discussions going on in the European Union and the Western European Union about the relationship between the European strategic and defence identity and NATO. I, therefore, think that it is worth spending some time considering that issue in some detail.
Nothing is more important to the stability of Europe today than that Russia maintains a relatively benign orientation and approach towards our security. If we were to return to the depths of a new cold war, it would cause serious problems for our economic and social goals, for the diversion of spending, for increased military budgets and for other matters, and it would have a political impact in Europe. It would not be in anyone's interests if that were to happen.
Recently, NATO was enlarged to take into membership the Czech Republic, Hungary and Poland, and it celebrated its 50th anniversary. Coincidentally, but undoubtedly unfortunately, within a day of those celebrations the air strikes against Yugoslavia began. The interpretation of that action and the way in which it is used by the nationalist and communist parties in the Duma, and by people who want to foster an aggressive, anti-NATO approach in Russia, is very unfortunate. If hon. Members think that I am exaggerating a little, they need only refer to the useful third report of the Select Committee on Defence, "The Future of NATO: The Washington Summit". The helpful appendix in the back includes the statement submitted by the Russian ambassador dated 26 November 1998—which is before the enlargement took place. He makes clear Russia's deep opposition. I shall quote two sentences, which is enough to give the flavour.
Especially sensitive is the idea of admission to the alliance of former Soviet republics, in the first place the Baltic States. It is an open secret that if any one of these states is enticed into the NATO we shall have to reconsider our relations with the alliance.
That was in November last year, and nothing that has happened in recent months, including the sacking of Mr. Primakov's Government and the internal crisis, gives rise to any optimism that the Russian mood has changed for the positive.

Mr. Ian Taylor: There is an additional problem with the Baltic states. I have yet to

meet a NATO general who is convinced that we could secure the Baltic states from attack. That has a knock-on effect on the European Union. It would be inconceivable that the EU would expand into territory that it could not provide a security guarantee in some form.

Mr. Gapes: I am grateful for that intervention, as I shall deal with the EU and the European security and defence identity in a moment. Anyone who has been to Estonia, as I have, and has seen where Narva is in relation to St. Petersburg will know that these areas are very close, and it would take no more than a few minutes for troops to go from one side of the waters to the other.
In his opening remarks, my right hon. Friend the Foreign Secretary mentioned the complications for countries that are members of NATO but not members of the European Union. He did not mention countries that are members of the European Union but not members of NATO: specifically Sweden, Finland, Austria and Ireland. There has been a continuing debate among the neutral and non-aligned states in the EU about the relationship between the WEU, which they also do not belong to, and the EU. If the WEU is to be completely removed from the scene, and if the EU is to take on all the functions of the WEU, the nature of the EU will significantly change. It will change not only for potential applicant members in the future, but for some existing member states.
I have been a long-time supporter of NATO. I even wrote a pamphlet 10 years ago that was not popular with people in the peace movement at that time, in which I argued strongly for Britain to stay in NATO. I describe myself as a left-Atlanticist, and I still take that position. However, I believe that it is time for Europe to have a much stronger defence identity. It is time for us to be able to take action as Europeans together in our own continent without having to rely on the whims of Congressmen from Alaska or Nebraska. We must be able to do that, as Europeans, but we must do it sensitively and we must take account of the political sensitivities and realities of this continent and our neighbours.
The communique that came out of the NATO summit on the future strategic concept of the alliance said:
This process will require close co-operation between NATO, the WEU and, if and when appropriate, the European Union.
How is that appropriate relationship to be worked out? Difficulties have already been highlighted by other member states. Only a few days ago, the Foreign Minister of Sweden, Mr. von Sydow, made a speech to an important meeting of the WEU Council of Ministers. He made an important statement when he talked about the Petersburg tasks that are currently on the agenda and are undertaken by the WEU. He said:
We must not risk losing the current momentum in the debate by entering into the issue of common defence. Just to be clear: Sweden cannot accept that the mutual defence commitments of article V of the Modified Brussels Treaty be included in the EU.
That is the Swedish position. There are similar concerns in other countries.
I hope that our Government, while pushing for greater co-operation with France over the St. Malo declaration—which I support—and for greater co-operation with Germany, will retain their traditional close relationship with the Nordic countries, particularly their excellent relations with Sweden and Finland, so that, in establishing the European security and defence identity and a much


stronger European voice within the Atlantic alliance, they do not risk making the position more difficult for existing EU members that are traditionally neutral and non-aligned, and do not, in effect, block future enlargement of the EU by other states.
On economic grounds—certainly Estonia is already there—there is no reason why the Baltic states should not be able to be involved in the European Union. The Finnish-Estonian linguistic relationship, the economic relations between countries from one side of the Baltic to the other and the good relations in the region, all point to the fact that there is a logic in having countries on both sides of the sea within the European Union.
That could help Russia economically. The European Union would be so close to the Russian market; Russian trade could go backwards and forwards into the EU. It would be a good way to build European security, but my worry is that, if we complicate the matter by getting into a discussion about defence, whereby the Russians fear that NATO's borders are being expanded to the borders of St. Petersburg, we will set back that economic development and non-military aspects of security.
It is important to recognise that, whatever the outcome of the current difficulties in the Balkans—the European Union clearly has an important role to play in the reconstruction programme and in building civil society, not just in Serbia, but in Croatia, Macedonia and other states in the Balkans—we need to move our focus a little further, to recognise that other potential areas of conflict border the continent of Europe, and that our relations with Russia, and future relations between all of Europe, east and west, remain vital to us all.

Mr. Michael Jack: I am grateful to you, Mr. Deputy Speaker, for calling me to speak at this stage in what is a very interesting debate.
One of my sadnesses is that, as I look at the place where the press would normally sit to report our affairs, I find large vacant spaces. It is a matter of some considerable sadness that a debate on matters that affect the well-being of the United Kingdom, our position in Europe and the world will go largely unnoticed by the media, who are sometimes all too quick to comment and to criticise on some of the complex issues that right hon. and hon. Members have already touched on in the debate.
The hon. Member for Ilford, South (Mr. Gapes) gave us some thoughtful observations on many important security matters. I found interesting his focus on the role of Russia. Clearly, some people might have felt that, had there been a stronger, more stable internal position in Russia, it could have played a more decisive role in negotiations before the conflict in Kosovo developed in the way in which it did. It is interesting to see the role that Russia is now playing to reach, I hope, some form of resolution.
I was interested in the Foreign Secretary's remarks about the situation in Kosovo and the role it will play in the Cologne summit. It was one of the occasions when he perhaps did not use the word "intensify". On just about every occasion that any statement has been made on the matter, when it comes to military action and to the bombing, the word "intensify" is used, as if that will give some guarantee of success. Yet, what is success in the conflict? I find it difficult to understand the measure of success.
Success at the beginning was to degrade the Milosevic war machine to such an extent that ethnic cleansing would be stopped, but still the tide of refugees flowed, still we pressed on with the bombing campaign—understandably, in humanitarian terms. Listening to the Foreign Secretary this evening, success seems to be being redefined as creating the opportunities where ground forces will be able to enter Kosovo, taking the refugees back to where they came from. It shows the difficulty in understanding and, at times perhaps, in supporting elements of the Kosovar policy. The aims and objectives of the campaign have shifted.
The debate takes place during preparations for the meeting in Cologne. I make a couple of quick points on what should be on the agenda before turning to the main part and focus of my remarks: agriculture. I should like the Heads of State to reclaim the agenda for politicians in Europe.
Too often when I go on the doorstep campaigning, the impression that is fed back to me is that it is the Commission that runs Europe, yet it is the Council of Ministers—in the many ways in which that institution manifests itself—that gives the democratic element and democratic accountability to what happens in Europe. If public confidence is to be maintained in the European Union—at a time when the purpose and membership of the Commission have properly been the subject of discussion and questioning in the debate—it is vital that people understand that it is elected representatives who have the final say, whether they be in the Council of Ministers or, indeed, the European Parliament. If Europe is to safeguard its institutional development, recapturing in the public mind the fact that it is politicians who are in charge will be important.
I make a short appeal to the Minister to reflect to the Leader of the House that, to give that important element of accountability further solace, we should reconsider the way in which the House scrutinises European legislation. I am aware that some improvements are coming along, but they do not involve the House of Commons and its Members looking at European legislation early enough in the process.
We do not have debates and comment on some of the Green Papers and pre-directive or regulation documents. The Minister looks sceptical as I say that, but in terms of the scrutiny process—I have been on both ends of it—Members of Parliament do not get stuck in, if I may put it that way, early enough in the process, when new ideas are floated that have yet to formulate in the form of directives or regulations.

Ms Quin: Surely the right hon. Gentleman recognises the recent improvements that were introduced via the European scrutiny White Paper, and the changes to procedures in the House to allow hon. Members to have an early say on matters that would come before European Council meetings.

Mr. Jack: I acknowledge that. In fact, I said it in shorthand in my earlier remarks. I said that I recognised that some changes had taken place, but I am looking at the position further upstream. It may be that, in reality, those changes do deliver what I still believe is lacking in our system.
One of the sadnesses is that the Cologne summit will not consider any further changes to the common agricultural package, which are much needed. Recently,


the Minister of Agriculture, Fisheries and Food was triumphing some great reform package, but, when one looked at what was agreed, one found that there was much difference between the rhetoric and reality.
The concern that British agriculture has about the whole question of reform arises against a background where, in the past two years, in real terms, farm incomes in this country have declined by 74 per cent. It is therefore hardly surprising that our farmers had hoped that the discussions on common agricultural policy reform would free them to use their efficiency in operating to the advantage of British agriculture. Sadly, the discussions did not have that effect.
The CAP reform package agreed in March neither meets the requirements of the World Trade Organisation, nor addresses the issues of preparing for European Union enlargement. Undoubtedly, the matter will have to be revisited.
The document prefacing this debate—on events of the past six months in Europe—mentioned, perhaps optimistically, the possible ending of the ban on British beef exports to Europe. It was a pity, however, that Opposition Members had to point out to the Government that invitations should be issued to European Union officials and veterinarians to inspect our facilities. The Prime Minister said that invitations had been issued to officials—to start the process of unlocking Europe's meat markets to our beef producers—but, at that time, they had not yet been issued. Had the Opposition not acted, the invitations would not have been issued until much later.
Sadly, not one ounce of British beef has yet crossed the channel for sale in European markets. Despite all the Government's triumphal rhetoric on the subject, British beef producers have not yet seen the result that they seek. I hope that the issue of speeding up the lifting of the ban will be addressed at the Cologne summit—if nothing else, in the margins—so that Europe's beef markets are once again open to our farmers.
Will the Minister have a word with the Heads of State also on the British pig industry—which is in desperate straits? The industry has not been helped by, for example, the French Government paying what seem to be illegal state aids to assist the French industry, while our own Government are sitting on their hands.
There would have been no movement on the issue of the French payments had it not been for Opposition Members' efforts in providing the Agriculture Minister with concrete evidence of them. He even challenged us—almost as a precursor to taking any action—to provide such evidence. So far, however, the Government have taken no action, and parts of our pig industry are facing extinction. The Government owe it to those producers at least to ensure that all our producers receive even-handed treatment within the European Union.
In March, the Minister of Agriculture returned from the meeting on CAP reform. Before the meeting, he said that he was in favour of scrapping quotas and shifting subsidies from production to income, and that the Commission's proposals did not go far enough. However, after the package was agreed, the Prime Minister—in The Times of 12 March 1999—dismissed all the Agriculture Minister's optimistic rhetoric by saying that the outcome was
not satisfactory as far as we are concerned.

I agree with the Prime Minister on that point. At the meeting, the Minister of Agriculture effectively sat on his hands—he really did not have anything positive to contribute to it. From the intelligence that the Opposition have gathered from behind the scenes of the meeting, it is certainly clear that the Minister really did not do very much properly to represent the interests of Britain's farmers.
Perhaps that is why, on 11 March, the National Farmers Union issued a press release entitled:
CAP Package 'Mixed Bag', says NFU".
Ben Gill, the NFU president, said:
The package is a 'mixed bag' for UK farmers, with most positive and negative elements contained within it.
The situation worsened, however, 15 days after the package was agreed in Brussels—when it was dealt with at the Berlin summit, and there was a betrayal of British farmers. The rats, as they say, got at the package and started to unpick it. Only 15 days after the package was agreed, the NFU president was saying that the results of the Berlin summit were deeply disappointing. He said:
The original agreement made by farm ministers has been partially unpicked and is now considerably worse. While superficially this deal may seem attractive there are significant hidden dangers.
British farmers will pay a heavy price for a deal which seems to have been made to allow some Governments to claim a symbolic victory.
He was indeed right about that.
The results of the unpicking were a reimposition of restrictions on British farmers, a reduction in arable area payments to British farmers, and delay in reforming the dairy regime—one sphere in which the efficiency of Britain's farmers really does shine—probably until 2006. If ever there were a betrayal of the interests of one of the most efficient parts of British agriculture, allowing that deal to be unpicked was it. The betrayal was most distressing.
Other member states seemed to triumph in the negotiations on the dairy regime. Greece, Spain, Ireland, Italy and one other member state managed to win an increased milk quota, whereas it will take years—until 2003, to be precise—before we receive a small increase in quota. Why was not British back-bone used in objecting to a settlement conferring a competitive advantage on those countries, at the expense of British dairy farmers? Our farmers are receiving prices that, in real terms, are the same as they were four years ago.
In the farming press, the Minister of Agriculture was telling us that the cosy so-called London club was meeting quietly with Denmark, Sweden and Italy to plot the downfall of the milk regime, which was restraining competitive forces in British agriculture. But—oh, dear—as soon as Italy got a whiff of more quota, Italy was off, the club collapsed, and the British Minister's back-bone went very soggy indeed.
All of those so-called developments add up to a so-called reformed CAP—which will cost Europe's taxpayers dear. Agriculture expenditure already accounts for over half of the Community's budget, and it is rising. In 2000, expenditure will rise to 37.3 billion euros. By 2002, it will have risen to 39.6 billion euros. After a small decrease, expenditure will rise again, in 2006, as the dairy reforms are implemented. Those costs will be a further


burden on Europe's taxpayers, and will go a long way in off-setting what the Agriculture Minister claimed would be a benefit to consumers.
Today, in just one line of his speech, the Foreign Secretary said that consumers will save £1 billion on their food bills. However, he forgot to add the salient detail that that estimate was predicated on the proposition that the savings will not begin until 2008. In fact, the reforms will create only £90 million savings in the first year.
Furthermore, the facts do not support claims that the CAP amendments will deliver real savings. Research provided to me by the Library shows that, in previous CAP reform, returns to producers have generally decreased, whereas shop food prices have increased. The research gives the lie to that much-vaunted claim that the reform will benefit Europe's consumers. Moreover, interestingly, the research also shows that food prices have decreased only in the potatoes and fresh vegetables sectors, neither of which have been subject to the current CAP reform.
Many elements of the reform have yet to be introduced. However, the Ministry—perhaps in a cost-saving mood—is arguing that the British lamb industry, for example, should be considering restricting its output, saying that it might be able to get better prices by doing so. Yet, the lamb industry is absolutely adamant that it wants the opportunity to sell competitively to Europe. There is seemingly a hidden agenda in MAFF to try to save money by such a measure. It is not very clever for MAFF officials to invite one of the most successful parts of British agriculture—a key feature in the upland economy—to cut back production.
I begin to wonder what is the Government's agenda for the British agriculture industry. If they really had the interests of British agriculture at heart, they would raise those matters at Cologne. Our agriculture industry is once again in a truly desperate position and I would have thought that it merited a mention on the Cologne agenda. It is an indication of the importance that the Government attach to agriculture that that item is missing.

Mr. Alan W. Williams: It is a pleasure to follow the right hon. Member for Fylde (Mr. Jack). I have participated in many agriculture debates over the years, but my comments this evening will be mainly on the single currency.
Relations with our partners in the European Union have been transformed in the two years since the Government came to power. Throughout their 18 years in office, the previous Administration seemed to be a reluctant member, very negative and destructive in their attitude. In particular, I remember Baroness Thatcher handbagging our European partners and trying to insist on her way. In the latter years of the Conservative Administration, there was the beef ban and the attempts to have it lifted by the absurd policy of non-co-operation, or vetoing many measures in which we believed.
The present Government were elected against that backdrop. We immediately struck a different chord and developed an excellent rapport with our colleagues in the European Union. Although we are not yet at the heart of Europe, that is our intention and we have adopted an attitude of co-operation and constructive dialogue. There were various opt-outs—on the social chapter and the

single currency. It will take time to make good on the latter, but that is our policy. For the next five or 10 years we will be in there, punching our weight with Germany, France and Italy, building the Europe of the 21st century.
We are making good progress, despite the fact that the right hon. Member for Fylde commented on our slowness in reforming the common agricultural policy. His remarks could have applied to many such attempts over the past 10 or 15 years. I remember particularly the MacSharry plan that was announced by the then Conservative Government as the great breakthrough. The tone of their statements at the time suggested that it would solve the CAP' s problems for ever more, but that was not the case. We are making slow and steady progress in reforming the CAP. Our budget rebate was assured at the Berlin summit. We are working for the enlargement of the Community and making good progress on Agenda 2000.
At the beginning of the debate, my right hon. Friend the Foreign Secretary made a substantial speech on the war in Kosovo. No one in the House or in any NATO country wanted military action. In the early months of this year, my right hon. Friend the Foreign Secretary worked extremely hard at Rambouillet to try to produce a peaceful outcome. However, Milosevic would not withdraw his forces and was already engaged in ethnic cleansing. Evidently, with summer approaching it was his full intention to continue, so we were forced to take military action. I strongly support the work of NATO, in difficult circumstances, and the leadership given by my right hon. Friends the Prime Minister and the Foreign Secretary, together with the United States Government.
NATO has worked to very high standards. We do not know how long it will take or what the outcome will be, but in the past few weeks I have detected a cautious optimism that the attrition in Serbia and on Serbian troops in Kosovo is slowly working. We hope that there will be a successful outcome before winter so that the refugees can go back. The EU and NATO will emerge stronger from the Kosovo episode. We did not want to take action, but we were forced into it. We had to stop Milosevic and his appalling policy of ethnic cleansing. Twelve months, three years and 10 years hence, Europe, the European Union and NATO will be stronger because of the action that is being taken.
I now come to the single currency which was launched in January. In the language of the market, we all expected the euro to be a strong currency that would rise in value against the pound, the dollar and other international currencies. It came as something of a surprise that during the past five months it has depreciated by about 10 per cent. However, that relatively slow start has not diminished my long-term enthusiasm for Britain joining the single currency when the economic conditions laid down by the Chancellor 18 months ago have been met and it is in Britain's economic interests to join.

Mr. Loughton: Will the hon. Gentleman give way?

Mr. Williams: Later, perhaps.
The pound is certainly far too high against the euro and other European currencies for us to contemplate joining. I wish that there would be a national debate on the correct level for our entering the single currency. I wish that we could hear the views of the CBI, the TUC, the Bank of England, the Government and the Opposition. I wish that


there would be a wide public debate over the next two or three years on what the long-term rate should be. Our experience of the exchange rate mechanism at DM2.95 to the pound is a depressing precedent.

Mr. Loughton: Will the hon. Gentleman give way?

Mr. Williams: In due course, but I want to develop my argument.
My own view is that a devaluation of the order of 15 per cent. is needed to achieve competitiveness. Perhaps the proper rate should be something like 1.30 euro or DM2.60 to DM2.70 to the pound.
In the past week or so I was concerned to read that my right hon. Friends the Prime Minister and the Leader of the House, in a speech and an interview, raised the possibility that the referendum on our joining the single currency may not be held in the second term of a Labour Government and that it may have to be delayed beyond 2001. We will not hold that referendum until the economic conditions are right and the Chancellor's five principles have been met, but there is a real problem in respect of getting the economy ready for the euro. My right hon. Friend the Chancellor has said that we do not want devaluation. The economic circumstances must be right before we can join.
The International Monetary Fund said last week that we cannot join at the current rate, because that would repeat the experience of the exchange rate mechanism. I agree that there must be devaluation before we can join. The following day, my right hon. Friend the Chancellor told the CBI that he would not contemplate devaluation. As far as he was concerned, the Bank of England's only target was the inflation target and it could not chase two targets at once. I believe that he is wrong, because all the countries that formed the single currency had to target their exchange rates. They had to have stable exchange rates before January 1999.

Mr. Loughton: I am following the hon. Gentleman's argument closely. He says that a fall of 10 per cent. in the value of the euro against the pound and the dollar is a slow start. I should hate to think what he would define as a fast start. Why does he think that the euro has been such a disastrous currency in its first four and half months, to the extent that many serious bankers in Wall street are saying that it is not a credible currency into which to put national bank reserves? Why does he think that it has gone down so much?

Mr. Williams: I am not a currency speculator, or an expert on the City, but my feeling, for what it is worth, is that the European economy is suffering from serious problems, particularly the high unemployment and slow growth in Germany and Italy. There is the added uncertainty that the war in Kosovo creates on the international exchanges. Speculators have tended to go to the safe havens of the dollar and the pound, because Britain is under such superlative economic management and has created a strong currency. In the longer term, as the European economy picks up and grows, the euro, judged over two or three years, will prove to be a strong currency. Nobody anticipated the early months being so difficult.
I said earlier that my right hon. Friend the Chancellor had set his face against devaluation. I think that he is wrong, as he was in 1992. During the months before Black Wednesday, the then Leader of the Opposition, the late John Smith, and the then shadow Chancellor, now the Chancellor, stuck out for the high value of the pound. At no stage did they say that devaluation would be the answer. I am afraid that my right hon. Friend has the failing of attaching himself to an over-valued currency.
Eddie George, the Governor of the Bank of England, is involved in cutting interest rates. In the report on the Monetary Policy Committee's most recent meeting, there were strong suggestions that the pound is over-valued and that interest rates should be cut to bring down the value of the pound. Over the next two years, I should like an aggressive policy of cutting interest rates. Already in the past 12 months they have been cut from 7.5 per cent. to 5.25 per cent. I should like further cuts to 4 per cent. over the next 12 months, and then to 3 per cent. the following year. Manufacturing industry certainly needs those cuts, as does the agricultural sector.
Yesterday's gross domestic product figures for the past quarter showed that we have achieved our soft landing. The figure touched zero in the past quarter. We do not want negative growth. The economy needs a stimulus from continued cuts in interest rates. Inflation is well under control and is not a problem. The figures last week were 2.4 per cent. for month-on-month inflation and a headline inflation rate of 1.6 per cent. The danger is that over the next two years we shall undershoot the lower limit of the target of 2.5 per cent., plus or minus 1 per cent. If interest rates were cut to 4 per cent. and then 3 per cent. over the next two years, we would achieve the devaluation that we need.
The argument against cutting interest rates too quickly is that it would add to inflation. What would a 15 per cent. devaluation over two years mean for inflation? About one quarter of our produce is imported, so a 15 per cent. depreciation in the pound would result in a one-off increase of about 4 per cent. in inflation. If that happened within one year, it would seriously affect the Chancellor's chances of meeting his target; but if it happened over two or three years, the additional inflation caused by devaluation would be half or a third of that 4 per cent.—about 1.3 per cent. a year over three years. That could be contained within the 2.5 per cent. target. That is why we need discipline in the other areas that contribute to inflation—the growth in average earnings or a too rapid growth in the economy.
My timetable for entry to the single currency involves the election in the spring or summer of 2001 and a referendum that autumn, enabling us to join on 1 January 2003. We would achieve our devaluation in the coming two years and would have a stable currency in 2002 and 2003.
There are problems of low economic growth in Europe, particularly Germany and Italy. The European economy is crying out for expansion. The European Union has a combined annual trade surplus of $100 billion. The American deficit is more than $200 billion. About 40 per cent. of that deficit is with Japan, which also has a surplus of about $100 billion. The United States has to carry the growth of the world economy, given the problems in south-east Asia and Russia.
How do we expand the European economy? Germany and Japan have a psyche of stagflation. Inflation is below 1 per cent. and they have enormous balance of payments surpluses, so why can they not stimulate economic growth? The normal stimulus is interest rate cuts, but rates are already very low—the European central bank rates are 2.5 per cent. Rates will have to continue coming down to 2.25 per cent., 2 per cent. or lower. Japan may even have to have negative interest rates. The economies need expansion. When that happens, the euro will prove to be a strong currency.
My constituency, west Wales generally, and the valleys have objective 1 status. I was surprised earlier that the right hon. Member for Charnwood (Mr. Dorrell), who has just left his place, seemed to imply that structural funds from the European Union were mistaken and counterproductive. For example, Ireland has seen rapid economic growth of some 7, 8 or 10 per cent. per year in the past six years and its objective 1 status has been a critical part of achieving such rates.
West Wales and the valleys, which form about half of Wales, have been identified as having a gross domestic product per capita of less than 75 per cent. of the European average, and so qualify for objective 1 status. I congratulate Welsh Office Ministers on their work in the past year to 18 months in making the case—and I congratulate the Government on their work at the Berlin summit and before in pressing the case for objective 1 status. Local government in Wales, the Welsh Development Agency and the new Welsh Assembly will all now be under pressure to ensure that we use that status over the next six years to 2006 to invigorate the Welsh economy.
I noticed an article in The Observer on 2 May about a task force that has been set up in the Welsh Office to consider objective 1 funding. It has set itself the ambitious target of economic growth of 4.5 per cent. a year over the next decade to increase Welsh income per capita to 90 per cent. of the European average from its present 83 per cent. I am pleased that that ambition exists at the highest level in Wales. British growth is at 2 per cent. a year, but the ambition is that objective 1 status will produce economic growth of 4 to 5 per cent. a year in Wales.
We will be in the remedial class for five or six years, thanks to 18 years of Conservative Governments and the destruction of our traditional industries. However, through European structural funds we will rebuild the Welsh economy. The Welsh Assembly will have the enormous responsibility of achieving that in the next five or six years.

Mr. Ian Taylor: By this stage of the evening, we have, as usual, had a scintillating array of speeches, not least from my right hon. Friend the Member for Fylde (Mr. Jack), whose contribution to agriculture debates is like grass to grazing cattle—an essential ingredient. However, the two speeches that caught my ear were those by the hon. Member for Hornchurch (Mr. Cryer) and my right hon. Friend the Member for Charnwood (Mr. Dorrell), who are not in their places to hear me say that I agreed with parts of both speeches. I am sure that the hon. Gentleman would be more embarrassed by that observation than my right hon. Friend.
Both speeches touched on the crucial point in a debate on the European Union—what is it for and how does it benefit this country. It is not that those of us who are more positive about Europe are somehow a little less patriotic and those who are Euro-sceptic are more patriotic. Some of the positions taken in the debate in the United Kingdom are close to being absurd and they perpetuate myths. The reality is that this House must address what is happening in the European Union: we are in it and nobody has suggested that we are about to leave the club, but there are many complaints about what the committee are doing. However, we will ensure that the European Union is in accordance with our wishes only if we are a full member of the committee, and not just a member of the club. If we do not like what is going on, it is largely because we are not playing a proper role on the committee.
We do not need to be run by Brussels if we organise Brussels to do things that we want to be involved in. That leads to natural differences between Conservative Members and the Government. The Government's agenda differs from the Conservative one in many crucial areas. My right hon. Friend the Member for Charnwood mentioned a liberal economic approach to some of the solutions that Europe needs to address. We can have a healthy debate about that, but it does not make one side right and the other wrong, any more than the British public were right or wrong to decide to change Governments as they did at the general election. I am sorry that they did, but I shall not criticise the British public for doing so.
We make different judgments about how to run the European Union, but to make changes we must understand that the United Kingdom will never make changes just because we are British. The Conservative party's agenda in the European Union is stronger the more we co-operate with centre right parties in the EU. Therefore, I am the last person who would criticise the Foreign Secretary for having a socialist agenda. All I ask is that the British public recognise that it is a socialist agenda and make their decision on that basis. The British people should clearly understand what the Labour Government will do in the European Union in the next year or two, because it will be important in its effects. That is the rub.
The Prime Minister made an important speech in Italy a few months ago in which he made several statements that made a lot of economic sense. However, we do not find much of that in the agenda of the European Socialist party. That is why I criticise it, and not because there has been co-operation between socialist parties.
Some interesting things are happening in the European Union, which are partly caused by the single currency. I admit that I am in favour of the single currency in the long term: if it works, we should be a member, as my right hon. Friend the Member for Charnwood agrees. I do not wish to get sidetracked into the single currency debate, because the House has had the dubious privilege of hearing me speak on that matter on many other occasions. However, it is interesting—and this is why I agree with the hon. Member for Hornchurch—that the single currency is based on some sensible economic factors, such as debt control and inflation, which will mean that some of the continental economies will have to change.
In a single market with no frontiers—once the programme has been fully applied—we will see changes in countries that national Governments will no longer be able to control and to which they will have to adjust. Look at what is happening in France. Superficially, France has a socialist Government, but they have introduced more reformist legislation on the structure of French industry than the previous Gaullist or centre right Government under Alain Juppé was able to do. For example, there have been more privatisations. Only in the past week or two, the French Government—admittedly cloaked in obscurity so that they did not offend their own supporters too much—started to recognise that the cost of labour is a factor in unemployment. If one overprices labour, in normal circumstances that will mean that employers do not take labour on or employ more people outside the country. The problem in France is not an endemic European-wide employment problem caused by lack of growth, but the fact that the French Government have pursued policies that have provoked unemployment in France. Therefore the solution is down to the French Government. If they were to continue down the route that they have tentatively started on, we would see changes very quickly.
Italy is another example. In the past few days, we have seen something that used to be unthinkable: a relatively small Italian company, Olivetti, has beaten off the might of Telecom Italia. Olivetti was backed by Deutsche Telekom, although in a rather anti-liberalised fashion. However, the small company has won. At least, it has so far, because the Italian Government have tricks up their sleeve that they may or may not decide to use. Nevertheless, the small company has won in a competitive bid.
Incidentally, and almost unthinkably, a similar competitive bid is apparent in the French banking industry. Banque Nationale de Paris has lobbed a stone in the water of the previously comfortable marriage between Société Genérale and Paribas. I am not saying who should win that contest, but things are changing.
It is very important that the Minister of State, who will wind up the debate, recognises explicitly that some of the policies that the Government will need to pursue over the next year or two are a good deal more in tune with some of the liberal economic ideas of the previous Conservative Government, if Europe is to be able to provide the competitiveness, flexibility and restructured labour markets necessary for economic survival in an increasingly difficult global economy.
That is not the nasty capitalist plot described by the hon. Member for Hornchurch. It is sensible economics, and must be adopted by Europe's left of centre Governments. The Minister must try and convince her fellow members of Europe's socialist group that the sooner such policies are put into practice, the quicker will the European economy begin to compete in the international markets with what I suspect will be a slowly resurgent Asia and the continuing buoyancy of the United States.
It is sensible economic policies, rather than the comforting phrase that we are "more respected", that will determine whether this Government are capable of rising

to the challenge of Europe. Respect is given only if actions deserve it, and it will take a lot to persuade me that the Government are going to carry matters through.
If Europe can compete in international markets, it can start to play a more influential role in other matters. The other point that I wish to make is that, if Europe really wants to follow through the NATO agreement reached in Washington, and to follow through implications of the St. Malo accord between France and the United Kingdom, it will need to have a vibrant economy and to contribute a higher percentage of national expenditures to defence.
The idea that there is a peace dividend that will enable countries to reduce defence expenditure is wrong. Many people thought that such a dividend would be earned after the collapse of the Berlin wall, but we were wrong. Paradoxically, we were wrong because the greater the world's uncertainty, the more important it is to have armed forces with the latest equipment and rapid reaction capability.
It is also important that Europe takes a leading role in defence, under the NATO umbrella, but it can do that only if it puts money into armed forces and weapons procurement. France and the United Kingdom traditionally have done that, but in both countries defence expenditures, as percentages of gross domestic product, are in decline. Every other European country in NATO has also cut defence expenditure.
I disagree with my right hon. Friend the Member for Charnwood in that I thoroughly endorse what I think was intended to be achieved with the St. Malo accord. I do not support the vague notion of a European army, as popularised by Mr. Prodi, whose idea appears to be that such an organisation would appear out of the blue. Wellington said about the British squares at Waterloo that they might not frighten the enemy but they damn well frightened him, and a European army would terrify me. I think that Prodi meant that a strong European foreign policy would have to be backed up with muscle.
We have the structure—NATO—with which to do that, but it is no good relying on the Washington accord and assuming that Europe can use NATO's equipment and resources even if the United States is not fully engaged. Europe must have sufficient resources of its own. If we want to ensure that, when other problems like the one in Kosovo arises, we can take decisive action—I hope with the Americans, but not determined by votes in Congress that may not go as we would wish—we cannot be dependent permanently on American intelligence or lift capacity, nor on American logistics support.
I do not mean that we should break up NATO and leave America to its own devices—the very opposite. We can engage America by showing that we can take action—with America's permission and agreement, but not necessarily with it playing a leading part—that is credible.
So it is clear that the two parts of my speech are linked. They represent a challenge for the Minister. I believe that Britain cannot stay outside the single currency and retain an influence on the creation of the single market which is so important for this country. However, if the currency is to be desirable, it must be based on a strong and competitive Europe, which in turn must change some of the practices that safeguard existing jobs rather than create new ones.
Over the past five to seven years, 87 per cent. of the jobs created in the European Union have been in the high-tech sector, not in the traditional industries. Yet for too many of our partners in this great exercise the policy is somehow to protect existing jobs rather than to create new ones. That is not the way forward.
The test is whether the Government have the willpower to convince our partners in the European exercise to make the critical reforms demanded by the single currency and to make the adjustments to the UK economy so that we can join. The creation of a stronger Europe will increase our influence in the world. That will mean that, in future, we will not get caught in a problem such as has developed in Kosovo. There, we know that ground troops will have to be used, although we cannot say so explicitly because—regardless of what was said at the Washington summit—we cannot deploy such troops without the logistic support of the United States.

Mr. Tony McNulty: It is a pleasure to follow the hon. Member for Esher and Walton (Mr. Taylor). His measured contribution did not excite too many enthusiastic nods on the sparsely populated Conservative Benches. He is far from the demented Euro-enthusiast described in the recent book by Giles Brandreth, the former Conservative Member for City of Chester. That author also mentions the Charnwood versus Fylde show that we have just witnessed. He writes:
Little Michael Jack, eager beaver Financial Secretary, was on the line.
'You know today's the day we publish the Finance Bill. I am supposed to be on the media spreading the good news on the economy, and what happens? I am pulled from every programme, and the whole thing is hijacked by the Secretary of State for Health'"—
that is, the present right hon. Member for Charnwood (Mr. Dorrell)—
'banging on about Europe. It is so bloody frustrating!'
That was on 2 January 1997, when the right hon. Member for Charnwood had his Pauline conversion to a more Euro-sceptic view. The right hon. Member claimed in his speech that he has held the same views all the time. However, the former hon. Member for City of Chester was a very close friend of the right hon. Gentleman—either that, or the book is fiction—and he writes:
This isn't mere positioning. Stephen's view on the EU has changed markedly over the last three years, but the message has only filtered out fitfully.
So there we have it. The right hon. Gentleman—who once represented Loughborough, and now represents Charnwood—was always a Euro-sceptic, or at least shifted in that direction when there was a leadership challenge in the air. He did so well in that challenge that now he has settled into a more natural, central position, between the sceptics and the Euro-enthusiasts, demented or otherwise.
It is interesting that much of what the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) said ranks very highly in the mythology, dishonest kidology and rhetoric in which the Conservative party indulges in. Like St. Peter in the Gospels, he denies his friends—those Tory Members of the European Parliament who sit on the executive of what he termed the European People's party—not once but at least two or three times.
Before the election, the Tories said that signing the social chapter would destroy jobs. Two years on, there is no sign of any destruction of jobs. In fact, more than half a million have been created. The piece of fiction produced as a manifesto by the Tories tells us that that is nonsense. It is certainly more—

Miss McIntosh: Will the hon. Gentleman give way?

Mr. McNulty: Not in mid-sentence. The hon. Lady must be fairly tired given that she has two jobs, but I shall get back to her a little later.
The shadow Foreign Secretary, despite his denial, is more than aware of the Tory MEPs in the European People's party. They clearly say that there must be a
"gradual—but resolute—transformation of the European Community into a genuine political union on a federal model".
Those are Conservative MEPs. Does that not make a mockery of the opposition of the right hon. and learned Member for Folkestone and Hythe to a federal Europe? It certainly suggests that the Conservative party is perhaps being disingenuous, or perhaps something more malevolent than that.

Miss McIntosh: Perhaps the House and the hon. Gentleman should remember that when Britain signed the social chapter, we agreed to be exempt from it for the first two years. That is why there have so far been no major job losses other than those incurred from the working time directive and the minimum wage.

Mr. McNulty: I am grateful to the hon. Lady, but I hope, in her best interests, that her interventions in the European Parliament are slightly better than that.
On defence, too, we heard hot air and wind from the right hon. and learned Member for Folkestone and Hythe. The Government's proposals for European defence co-operation were approved by NATO at the recent Washington summit. All EU members of NATO signed up to them. There is an accord, as the hon. Member for Esher and Walton said. In NATO, and in some parts of the House, a grown-up and mature debate is occurring on European defence co-operation.
Another example of the naivety, malevolence, incompetence and disingenuousness of the Tories is the statement in their manifesto that there should be one parliamentary location for Europe. They suggest that it should be Brussels. Yet in their next breath, they say that they are totally opposed to any extension of majority voting. They cannot have one without the other. The French will never sign up to having Brussels as the only location for the Parliament. Under qualified majority voting, it will never happen. Perhaps the Luxembourgeois will not sign up to it either.
That is a good example of how replete the Tory manifesto is with dishonesty, but there are more. Their manifesto calls for a stop to the abolition of duty free, but it was the Conservative Government who negotiated that. What weasel words does the manifesto contain? I had the misfortune of having to pay for that lovely document, so the Tories got a few bob out of me; I tried using ecu, but they would not have them. "In Europe, not run by Europe" says about the protection of duty free:
When plans were drawn up to abolish duty free, we set out clear conditions which had to be met.


I have seen the conditions; they are not that clear. It goes on:
They have not been met. So we believe that duty free must remain in place.
Since when have they thought that? Since 2 May 1997. Had they won the election, duty free could go to hell in a handcart.
There is nothing of substance in their manifesto. In three little lines, we can find one of the most historic flip-flop U-turns in Conservative party history, though God knows there have been plenty of them in the past two years. Here is another example from their pretty little manifesto. It says:
We want to see humane treatment of animals across the whole of Europe.
Yet they troop in here to destroy the Bill on fox hunting and one of them—just one—singlehandedly destroyed a private Member's Bill on fur farming that 11 of the 12 remaining fur farmers in the country had signed up to. Somehow the right hon. Member for Bromley and Chislehurst (Mr. Forth) in his south-east London seat knows more about fur farming and humane treatment of animals than the fur farmers themselves do. That was abject nonsense from him.

Mr. Loughton: Why did the Government not support the Bill then?

Mr. McNulty: If the schoolchildren on the Back Benches want to speak, they can stand up and I will let them in.

Mr. Loughton: rose—

Mr. McNulty: Oh, there he is.

Mr. Loughton: As the hon. Gentleman takes such exception to the passages on animal welfare, would he tell us why his Government did not support the fox hunting measure, why they did not rescue the Fur Farming Bill and why they have done absolutely nothing about live animal exports and a host of other promises in their manifesto that have not even been started on? Can he explain that?

Mr. McNulty: Yes, I can, and in one simple phrase—the hillbillies up the other end of the building. We have a full five-year programme covering all aspects of the EU, including animal welfare. We are implementing much of our manifesto, such as the minimum wage, the Health Bill and other matters to do with the EU. We will not have it all blocked by the hillbillies up the corridor.
The whole Tory manifesto is full of contradictions. It is all over the place, but that is just a symptom of the Conservative position on Europe. It is rumoured that the document is just their official manifesto. A minority report challenging some of it is expected out soon, and two unofficial alternatives are on the way as well as the one produced by the completely separate pro-European party. The Conservatives are all over the place, trying desperately to talk in code so that the xenophobes and

Europhiles can somehow seem to be speaking the same language. It does not wash, and the people of Britain will see right through it.
I am glad to see that my hon. Friend the Member for Hornchurch (Mr. Cryer) has popped back into the Chamber. I want to share with him one matter on which we agree.

Mr. John Cryer: Is there one?

Mr. McNulty: One among many, but not too many. I agree partly with what he said about London, although I do not share his doom and gloom about objective 2 status. It is right to get London's problems on the record. Those Members who represent outer London—and the responsibility weighs no less heavily on our inner-London counterparts—have a difficult task in persuading anyone on our own side of the House, never mind the Opposition, about the peculiarities of London. There is a myth that the whole of London and all its 7 million or 8 million inhabitants are rich and that there is no poverty.

Mr. MacShane: Streets paved with gold.

Mr. McNulty: My hon. Friend is joking, but that myth is a real problem. The streets of London are not paved with gold. Fourteen of the country's 20 poorest boroughs are in London, and they cover a significant majority of London's total area. In one sense, the city is a wealthy one, but it also has some of the country's most deprived areas, a fact that must be got through to the Government and to Europe.
Average earnings among Londoners are 30 per cent. higher than the UK average, but in boroughs such as Hackney and Tower Hamlets, more than one in three adults are on income support. Gross domestic product in London is the highest in Europe, but London has more unemployed people than Scotland and Northern Ireland combined. The European Commission and the Government need to take those matters seriously when they work on objective 1 status.
London has suffered far more than most, not over the past two years, but over the past 15 to 20 years. There has been a serious decline in manufacturing, which has largely gone. I do not make some cheap party political point here: the decline was rooted in the early 1970s and the oil crisis, and it has continued from there. It has not happened over the past two years. It was not some wicked plot by Baroness Thatcher and her Government to get rid of London's manufacturing base. A range of geographic and economic circumstances have contributed to the decline. It has not been matched by increases in growth in the service sector, as some people might think. Between 1984 and 1996, London gained only 9 per cent. extra service sector jobs in comparison with the west midlands, which gained 30 per cent.; the south-west, which gained 34 per cent.; and Scotland, which gained 22 per cent.
I am not saying that London is poverty stricken, but some flexibility is needed in the measure for objective 2 status to capture areas with deep pockets of poverty. At the moment, objective 2 status is limited to a small area around the Lea valley. The Association of London Government and others have clear proposals to expand that area, but not, hon. Members will be happy to know, to cover the west end and some other parts of London—


certainly not the constituency of the right hon. Member for Bromley and Chislehurst, although even a borough such as Bromley, which is not dissimilar to mine in Harrow, has strong and affluent parts but also suburban pockets of poverty which are all the worst for being within seas of affluence.
We ignore at our peril, and not merely in London—I am sure that it happens elsewhere but I can speak only for London—the increasing difficulties caused by suburban pockets of deprivation. Precisely because they are suburban they need to be tackled differently from inner cities where an entire area is poverty stricken. That was my pitch for London.
I must return to the official Conservative manifesto document. If those who run—I use that term loosely—the Conservative party were honest, the leaflet would not be called, "In Europe, not run by Europe". One would only need three of those words. One could drop the "run by Europe" and move the "not" up front so that the title was honest and stated "Not in Europe". My hon. Friend the Member for Hornchurch would agree. He would have noted when he spoke that the cheers that he received were from Opposition and not from Labour Members. Clearly, that would be the honest position for Conservative Members.

Mr. Cryer: Will my hon. Friend acknowledge that I made a specific point and that I am not nationalistic in my views towards Europe—not a little Englander? My objection is towards the treaty, so I could be described as anti-treaty but not anti-Europe and I hope that my hon. Friend will acknowledge that.

Mr. McNulty: I will happily acknowledge that and I certainly did not mean to cause my hon. Friend offence [Interruption.] No, I did not and I shall not dwell on which treaty, or which aspect of which treaty, as we have discussed it at length before. I certainly would not dismiss my hon. Friend as a little Englander in any way. I shall save those remarks for Conservative Members—those who matter, of course, as I shall ignore those who do not.
Let us consider the next five-year plan—there are Stalinist implications here and I make no reference to my hon. Friend the Member for Hornchurch—according to the Conservatives. They may be waking up. All of a sudden, we are told:
Conservative MEPs are determined to fight fraud and maladministration in Europe".
Where have they been? What were they doing for 18 years, both as a Government and as MEPs within the European Parliament? Not a whole lot.
When I had been barely three or four months in the House, I had the great pleasure to serve ad nauseam—no, I should say at length—on European Standing Committee B. We discussed at length the first year's auditors report. I was a member of the Committee long enough—I did not escape for a year—to be there when we discussed the second report. Both those reports preceded all the recent stuff about Commissioner Santer. They concerned the last two years in which the Conservative Government were in power in this country and the reports showed how the previous Government manifestly failed to do anything about fraud in the European context. The Opposition spokesman, the hon. Member for Windsor (Mr. Trend), shakes his head, but he should look at the documents that

European Standing Committee B studied. If anything, Conservative plans were to take budgetary lines out of and resources away from the auditing functions of the European Commission, not to beef them up or add to them.
Now, the Conservatives come a little late in the day to being allegedly concerned about fraud. Indeed, only the other day—perhaps the hon. Member for Vale of York (Miss McIntosh) can tell us whether she was a party to this—Tory MEPs voted against a recent member statute that meant that MEPs, perish the thought. had to provide proof of expenses before claiming any money. Perhaps, after some thought, the hon. Lady will tell us whether she voted against such a radical move towards accountability in the European Parliament. I see that she has thought already.

Miss McIntosh: Perhaps this would be a good moment to ask the hon. Gentleman to ask his right hon. Friend the Minister of State, who is to reply to the debate, why this country welcomed the fact that a 40 per cent. income tax is to be imposed on MEPs, but there is to be a five-year contributions gap. That seems to be in line with taxing people on a contributory basis and then giving them a five-year contributions holiday.

Mr. McNulty: I was tempted to ask the hon. Lady to give way, but then remembered that I was on my feet. People from Yorkshire down to Essex will note with interest that the hon. Lady, who represents Essex in the European Parliament I believe, failed to answer where she stood on the thorny issue of MEP's expenses. That is fair enough—perhaps she will have a chance to do so later.

Mr. MacShane: We have an hour and a half.

Mr. McNulty: She may get there in the end.
The manifesto states:
Conservative MEPs are determined to fight fraud and maladministration in Europe.
We will wait and see. They have had the best part of 20 years to do so and have done precious little, so why should we or the people of this country start to believe them now?
The manifesto continues:
Conservative MEPs will oppose Euro-Socialist efforts to impose new burdens on business, new Euro-taxes, new trade-union privileges and new red tape.
Let us explore that commitment further. When challenged in Department of Trade and Industry or Foreign Affairs Select Committees, red tape often seems to mean health and safety and a range of other provisions that any normal sensible and good employer would want to provide anyway. That commitment is code for opposing much that is in the social chapter. Why do the Conservatives not say so? It is code for opposing any number of aspects of the social chapter that people in this country like.
The manifesto goes on:
Conservative MEPs will vote for the completion of the single market, to secure greater competition and wider consumer choice at lower prices.
It is not for me to remind people of recent coverage in the press in the past year or two, and before that, which states that the variation and disparity in prices is between


the European mainland and Britain. What did the Conservatives do in 18 years in power to remove that disequilibrium in consumer choice and prices? Absolutely nothing. Therefore, why should the people of Britain start to believe them now in any context?
Then we are told:
Conservative MEPs will push for effective action to make it easier for British citizens to trade, travel, study, work and live throughout the EU.
I do not know why they do not add motherhood and apple pie to that list—everyone has signed up to that commitment. This is a new bold initiative from Conservative MEPs—I do not think so.
Finally, the Conservatives say among other things that their MEPs
will work for proper environmental and consumer safeguards".
Why should we believe that? They have done nothing about it for the past 20 years either in government or as a feeble Opposition.
The best laugh is that:
Conservative MEPs will defend Britain's farmers and fishermen to ensure they get the best possible deal in Europe.
Where have they been for the past 18 years? What did they do for the interests of fishermen or farmers in Britain—precious and absolutely little. Now, returning to their fluffy little words, they say:
Conservative MEPs will use the European Parliament's powers to advance Conservative principles"—
a contradiction in terms surely—
and resist Socialism in Europe.
I am happy to say that this document is replete with errors and contradictions. It is abject nonsense from start to finish, and bears no comparison with reality, or the reality of the Conservatives' record in government. Two years later, why should anyone take any notice of them?
The right hon. and learned Member for Folkestone and Hythe made some cursory introductory remarks about Kosovo. I felt like intervening then, but it would be nice finally to nail the lie, if indeed it is a lie, that the Conservatives have not yet paid back the £18,000 that they got from Slobodan Milosevic's front companies in the run-up to the general election. If they have paid it hack, fine, let them say so. If they have not, everything that they say about Kosovo or against Milosevic must be seen in that context. That is a fair point. If the Tory party, or at least those who have captured its soul, if indeed it has one—a malevolent, nasty group of xenophobic throwbacks and malcontents—were honest about their manifesto, it would be called "Not in Europe" or "Europe not on your Life, Guy" instead of "In Europe, not run by Europe". That latest pithy phrase is all that the right hon. Member for Richmond, Yorks (Mr. Hague) could come up with to try to hold his silly little party together. The Tories are all over the place on Europe and their cop-out on the euro has happily rendered them completely irrelevant to the future of this country. Long may they remain so.

Mr. Tim Loughton: As always, it is a dubious pleasure to follow the hon. Member for Harrow, East (Mr. McNulty). It is intriguing

that in the entire 23 minutes of his manic rant he mentioned almost nothing about the Government's policy on Europe or the European Union, which is the title of the debate. It was all about his weird interpretation of the Conservative party manifesto on Europe. As we heard earlier, it is the Conservative party manifesto because we have our own manifesto on Europe, not one that we had to sign jointly with 20 other supposed partner parties in European socialism.
A debate on Europe in Government time is a rare beast these days. It took a Conservative Opposition day debate a couple of weeks ago to bring up European fraud. It took a Liberal Democrat Member's Adjournment debate some months ago to discuss the changeover plan. That was so important an announcement that the Prime Minister came to the House and regaled us with the luxury of all of 67 minutes of statement and questions when it is conceivably the most important sovereignty matter to face the House in a generation. Constant Conservative questioning on the withholding tax is still seeking a statement from a Treasury Minister. It is always interesting that Labour Members avoid the word that dare not speak its name, sovereignty. Any Conservative Member concerned about the dilution of British sovereignty in key areas is cast aside as a ranting little Englander, and no debate ensues.

Mr. John Cryer: The hon. Gentleman talks about probing the Executive on European issues. Neither of us was here then, but does he remember that in 1992, shortly after Maastricht, the Conservative Government got a bit jittery about the questions being asked about the treaty, kicked it upstairs and removed the time specifically allotted every fortnight for questions on the European Union? What does he think of that?

Mr. Loughton: The hon. Gentleman must admit that in those days we had much more debate on the subjects at the heart of Europe. The Maastricht treaty will affect us for years to come. The press and Members' questions were full of nothing but the treaty. However curtailed debating time was, it was considerably more than the few hours that we have had in the two years under new Labour.
This is a key time in our relations with Europe. The elections on 10 June will result in a new Parliament with many more powers than its predecessors had, thanks to the treaty of Amsterdam. It will have powers of co-decision in 38 areas of legislation where previously it was limited to 15. They include employment, social policy, health, transport, consumer protection and free movement of workers. There are powers to demand accountability from the European Commission and in respect of various other activities of the EU. That has been lacking in the past.
All this is happening in the context of an election that is probably doomed to the participation of only a third of the British electorate. That electorate will be exceedingly confused when they come out of the polling stations. They will resent not being able to vote—for most people, and for the first time in British election history—for a candidate of the elector's choice. It is only the Conservative party that is holding a debate on Europe, although I fear that too much of it is held in public. However, the real issues relating to Europe are being debated by the Conservatives; they are being completely skirted by the Government.
Labour party political broadcasts for the European elections are wholly free of European content. We see scenes of schools in the United Kingdom; the new deal is mentioned and we hear about pensioners and eyesight. We see nothing about European policies and the role of the Labour Government in Europe—there is a little bit tagged on at the end of the broadcast to remind people that it is a European election and not merely another homily on the fact that the Prime Minister can walk on water.
As we have heard so many times, the Labour party could not come up with its own manifesto for the European elections; it had to join in with the manifesto of the European socialists. We hear that the Prime Minister has rejected calls for a televised debate on the subject of Europe. Such a debate would ensure that more people in this country were enlightened as to the real issues.
There are two main fundamental issues, of which the first is sovereignty. There is an attack on the authority of this place through some of the measures that the Government are considering in their shared manifesto. The second issue relates to the inevitability argument-that the political and economic integration that we are seeing under this Government are all about softening up the British public to accept entry to the euro as inevitable.
To go back to basics, there are three roles of Government. The first role is to tax their subjects; the second is to defend their subjects in time of war; and the third is to administer justice and maintain the rule of law in this country.

Mr. Win Griffiths: The hon. Gentleman has put them in the wrong order.

Mr. Loughton: They may be in any order that Labour Members choose; there is no order of preference. However, I shall deal with the last role first. Corpus juris is a phrase that has hit the headlines in recent months as the embryo of a future European criminal code. As the UK is one of the few countries in the EU to use the adversarial system—almost alone against the inquisitorial system elsewhere—it is clear which system will be the winner, despite the fact that our system has served this country well over many centuries of English law.
In relation to the right and the role of Government to defend subjects in time of war, we hear more and more about a common European defence policy. A country can wage war only by taxing its subjects in order to raise revenue to fund that war. That relates to the first of the issues that I raised: the subject of tax. Perhaps it is fitting that, as we speak, the ECOFIN meeting in Brussels is under way, discussing the future of European taxes—not least the withholding tax. If it goes through, that tax will be especially lethal to thousands of jobs in the City and will cost billions to the balance of payments of this country's trade.
During the past few days, news has leaked out—without an announcement to the House, as so often happens—that the code of conduct group, chaired by none other than the Paymaster General, is considering no fewer than 185 different tax rates and rates of so-called harmful tax competition. "Harmful tax competition" is a well worn phrase—it probably contains the greatest paradox of all. To my mind, tax competition can be nothing but beneficial, but we have been spoon-fed that phrase about harmful tax competition from all angles. Apparently,

the code of conduct group is considering whether the tax breaks for small businesses in Northern Ireland will have to go, even though those tax breaks were only introduced in the Finance Act 1998—on whose Standing Committee I served. The group is also considering the scrapping of enterprise zones for depressed areas.
It is perhaps ironic that today, when the Standing Committee on the Finance Bill is discussing the tax treatment of British industry, the Paymaster General is apparently discussing the eradication of tax breaks for that industry. The Paymaster General must be holding some interesting conversations with herself. She has one hat on when she is in the Committee Room discussing the Finance Bill and preparing to abolish a measure that the Government introduced last year. She wears another hat as chairman of the code of conduct group, saying that the tax break is completely unfair and that we shall of course go along with banning it. I hope that she will not resort to the usual tactic of saying different things in different places to different audiences. Has the House been kept informed of any proposals of the secret committee, which is chaired by a Minister, that will inevitably dilute the House's authority to set the taxes that it thinks appropriate for our subjects, to whom we are all accountable?

Mr. Griffiths: Yes.

Mr. Loughton: The answer is no. It is no good Labour Members disagreeing: a list of the taxes and reliefs under consideration has never been released, despite constant parliamentary questions from this side of the House. Despite oral questions at Question Time, the Paymaster General refuses to describe what is on that list. Apart from the handful of measures that I have described, the list has never been released. It will affect the powers and privileges of the House to set taxes and to grant tax relief to our subjects, yet we—the legislators of this country—are not privy to that information. It will be discussed first with Finance Ministers of other countries behind closed doors in smoke-filled rooms. The first we will hear about it is through a leak, on the internet, or via a statement from the German Finance Minister, as occurred this evening.
Have we had any statement from the Government? Of course not. The Government have refused to publish the list or to give any details about the timetable to which the code of conduct group is working. We are left to guess the details. Yet those decisions represent the biggest transfer of sovereignty from the House that we have ever seen—and all in the name of ending the paradox of harmful tax competition.
I was at Mansion house a couple of weeks ago when the sacked-but-still-at-his-desk Commissioner Mario Monti gave a speech to the City of London. He made it clear that the withholding tax will be levied and that, if the Government do not get their act together and compromise, it will be much to the detriment of all concerned. The Commissioner offered very little hope to the eurobond business in the City of London, and all hon. Members know what will happen. If we have a withholding tax, the business of eurobond trading in the City of London will go overnight to Zurich and back to the United States, whence much of it came in the 1980s. That is a prime example of cutting off our nose to spite our face.
The Government publication "Developments in the European Union" refers to the taxing of savings. It claims that the withholding tax project is being discussed in order


to eliminate evasion of tax on cross-border payments of interest to individuals in the EU. Yet the measure will affect people who live outside the EU. At a stroke, they will take their business to other financial markets in other parts of the world—namely, Switzerland and the United States. Apparently, we are going to let that happen.
Today's ECOFIN meeting in Brussels provided an ideal opportunity for Treasury Ministers to stop talking tough and start acting tough. Just 12 days ago, the Chancellor said at Treasury questions:
I have made it absolutely clear that the United Kingdom will not accept any directive that requires member states to introduce a withholding tax. It has been absolutely clear for months."—[Official Report, 13 May 1999; Vol. 331, c. 405.]
For once, I agree with the Chancellor: it cannot be clearer than that. On 26 January, the Economic Secretary to the Treasury said:
We will not agree to any directive that applies to eurobonds. We will continue to defend the interests of the City of London and we will not accept any proposals which might damage it.
She said that the Government were prepared to use their veto to block the "disastrous" withholding tax. The Paymaster General—who was not busy chairing the code of conduct group at the time—said:
We have made it absolutely clear"—
there is clarity all over the place—
that we will not agree to any course of action which would seriously damage the UK and other European financial markets.
Today was the day for the Government to cash in on the respect that the Foreign Secretary opened the debate by claiming the Government had built up in bucketfuls with our partners in the other capitals of Europe. Today was the day for the Foreign Secretary and his Treasury colleagues at the ECOFIN meeting to tell their European partners that we will not accept withholding tax. Today was the day to wake up those European colleagues and tell them that introducing a withholding tax, which some years ago destroyed the bond market in the US overnight and which failed dismally in Germany when it was introduced in 1987, is against the interests not only of the City of London but of any of the financial markets in the European Union.
Failing the Foreign Secretary's ability to cash in on that respect or to persuade his European colleagues of his argument, today was the day to use the British veto. It is late in the day for that. The ghastly concept of a withholding tax should have been strangled at birth, as all Conservative Members realised when it first reared its ugly head. The Government have only themselves to blame for getting to this pretty pass today, because they should have stamped on the withholding tax many months ago when they first had the opportunity to do so. However, they wanted to appear to be good Europeans who go along with their EU partners, so they singularly failed to stamp on it.
The Government failed dismally again today, because the result of the ECOFIN meeting is that a compromise will be put on the table. The last rites on withholding tax and the eurobond market will conveniently be delayed until after the European elections, so as to minimise the impact on the Government and their policy on Europe. The Chancellor will write a technical note about the withholding tax. He had two years to write all manner of

technical notes. We all know what will happen in a few weeks—there will be a fudged compromise, and that will be the end of the eurobond market in the City of London.
The City does not believe that any fudged compromise to exempt the wholesale bond market, such as the one discussed at ECOFIN today, will prove at all workable. The director general of the London Investment Banking Association recently said:
A plan to ameliorate a proposal which is clearly unsatisfactory will not work.
Such a proposal would trigger a two-tier market of new and old bonds and early redemption clauses and would not work. The eurobond market—which is worth $3 trillion a year in London alone, with some 11,000 jobs relying on it—would leave London and the European Union overnight, much to everybody's detriment.
It is no surprise that, tonight, Swiss financiers are metaphorically licking their lips in eager anticipation. For the past few months, they have been busy installing new trading systems for dealing in eurobonds denominated in euros which are fully compatible with all EU country needs. The Swiss Economic Affairs Minister recently said that the Swiss were looking to the capital flight out of euroland which will be caused by the introduction of a withholding tax. They have already targeted 10 per cent. of the European equity market for the end of this year, and they are preparing to abolish stamp duty to make that flight even more rapid.
It is as if the City of London financial markets are to be punished for the British people's reluctance to accept at face value the Prime Minister's mantra, "The euro is good for you." They are to be punished also because the City is proving that there is life outside the euro, and a profitable one at that. Despite Government claims that the City needs to be part of a euro financial community, the opposite is proving true. We still have nearly 600 foreign banks—a record number—operating in the City of London. Some 600,000 people work in the financial community in the City, which is more than the entire population of Frankfurt.
Americans have not been scared off by our failure to enter the euro yet. The Japanese and the Germans have not been scared off. Let us consider some of the participants in the City of London. Merrill Lynch, one of the largest American banks in the world, has 5,000 staff in the City and has just spent £200 million on a new European headquarters. Where is that headquarters? It is in London. Where has another large American bank, JP Morgan, based 3,800 of its total European staff of 4,500? In London. Salomon Brothers has 1,800 of its 2,000 European staff based in London, and recently claimed:
We have no plans to change that balance because of the arrival of the Euro. If anything, more of our business will be consolidating in London.
The Germans agree—the managing director of Dresdner bank, which now owns Kleinwort, said:
London will retain its outstanding importance, even if Great Britain does not join monetary union.
Similarly, the Japanese—Sanwa, one of Japan's largest banks, is closing its Paris offices and branches to consolidate European business in London. Its spokesman said:
We need London but we do not need both Paris and Frankfurt.


From the implications of what happened today, it seems that the City and the thousands dependent on it in the financial services industry and beyond are to be punished by a Government desperate to prove themselves good Europeans, above all else.
The surrender of the withholding tax is just the tip of the iceberg. We have 300 other taxes and tax reliefs, which could now be up for grabs and which lie at the mercy of European Finance Ministers who take exception to the competitive advantage of so many low tax rates and pragmatic reliefs, many of which were built up over 18 successful years of Conservative economic rule. All are now under attack from the Government's taxing by stealth and after today are equally under attack from levelling up to continental rates—except in the case of British lorry drivers, on whose behalf our Finance Ministers see no reason to bat.
The British public are not stupid. They are waking up to the precedents being set in the harmonisation of tax rates and relief. They are wising up to the effect that that will have on stamp duty, corporation taxes, social and employment taxes, taxes on savings, the rates and scopes of VAT, and ultimately the effect on income tax, one of the most powerful tools for raising revenue available to the House.
The Government are desperately trying to wear down the public for the next and crucial phase in European integration—British entry into the euro. We all know that opinion polls consistently show that the British public are not in favour of joining the euro. It is an interesting paradox that many of the same opinion polls reveal that most British people think that going into the euro is inevitable.
Phrases such as "In a common market a common currency is common sense" are touted by the marketing gums behind the Labour party and shot at us. The former Economic Secretary to the Treasury, now the Minister for Transport, said a little while ago that in a few years, when the German tourist is on his sun-lounger next to the British tourist on his sun-lounger buying a beer on a Spanish beach, and the German tourist pays with his euros, while the British tourist has to convert his currency into euros before he can pay, British people will wake up to the fact that joining the euro is a sensible course of action. However, that German tourist may not be able to afford to be on the beach buying a beer, because of what has happened to the combined European economies. Those are the real issues, which the Government try to skirt around.
We recently saw the Government trying to wear down the resistance of the British public by going ahead with the changeover plan after only 67 minutes of explanation from the Prime Minister. British business and its shareholders will have to pay up billions. British taxpayers, through the Government, will have to pay up billions to prepare for our entry into the euro currency, which on the balance of probabilities, if it still depends on the outcome of a referendum, will not happen. The Government are selling off our gold reserves to reinvest in euros and to pool our reserves with the euro by stealth, to make it inevitable.
None of that has anything to do with considerations of sovereignty. The Government are surreptitiously resorting to the inevitability of gradualism. The real issue of sovereignty has been completely avoided in any

contribution that I have heard today from the Government Benches. The issue that needs to be countered is that of inevitability. That is the Government's only chance of gaining credibility for our entry into the euro.
Nothing is inevitable, except death and taxes—and also, perhaps, the capacity of the hon. Member for Harrow, East (Mr. McNulty) to alienate everyone around him after a 27-minute rant. The Government do not want to discuss the real issues in Europe. They go to great lengths to avoid debating the real issues affecting the British people.
As with so much, new Labour resents the process of scrutiny and accountability which is the modus vivendi of this place. The Foreign Secretary referred to our attempts to scrutinise the Government on their plans for harmonization of taxes, and we have scrutinised them in respect of the increased social costs, red tape and regulation involved in Europe. Labour Members say that all that scrutinising, which is the role of the Opposition in the House, is down to fear of Europe. What a pretty pass that is, and on 10 June we shall see whom the British people fear most.

Mr. John Smith: I welcome the opportunity to contribute to this important debate on the European Union in the run-up to the Cologne Council and the European elections, which will take place on 10 June. Although the hour is late, a number of hon. Members want to speak, so I shall keep my comments as brief as I can and focus on one area that has perhaps not been covered enough—the clear economic advantages to this country of membership of the European Union.
I have to admit that I was no great enthusiast when we first considered whether to enter the Common Market over 20 years ago. At that time, less than 20 per cent. of this country's income from foreign trade came from trade with the rest of Europe. However, 25 years later, Opposition Members are adopting an unbelievable position—this country depends on the European Union for nearly two thirds of its income from foreign trade. They argue against greater co-operation and against constructive engagement. They rule out a single currency for a fixed period—for decades, or whatever it is—which is absolutely ludicrous. Small wonder that this country's business community has no support for them whatever.
The party that once claimed to be the party of business has become a joke in the business community in Britain as a whole and particularly in the business community in south Wales, which is my part of the world. Tory Members of Parliament were wiped off the map at the previous election because of their completely unrealistic views on Europe. If they do not get their act together, stop squabbling and pull together a coherent economic policy on Europe, they will stay in the wilderness indefinitely.
The advantages of membership of the European Union are considerable. When I was briefly not a Member of the House, I worked in the inward investment business in Wales and I can tell hon. Members, if they do not already know, that the European Union is one of the most attractive—if not the most attractive—investment locations in the world. We sometimes forget that the European Union has 380 million of the most sophisticated consumers in the world consuming sophisticated goods and services at a higher rate of value than any other market in the world. It is the biggest consumer market


by value, if not by volume, of consumption. That is the attraction of the European Union, that is why there are huge economic advantages in continuing to work closely with the rest of Europe and that is why the only policy that this or any Government can adopt is pragmatism towards Europe.
In south Wales, our economy has been transformed over 20 years. It was dominated by heavy industries, primarily coal and steel, which produced almost exclusively for domestic consumption, but 80 per cent. of the manufacturing industry in south Wales now produces goods for direct export to the European consumer market. That is why our business people want a Government who will continue to engage in it.
However, we should draw the attention of my right hon. Friend the Minister to a feature of that hugely attractive and economically seductive marketplace. It is structured unevenly and two thirds of all consumption in the economic union takes place in only 10 per cent. of the territory.
The wealth of the European Union is very concentrated. The highest rates of GDP per capita are in an area running through central Europe with which we are all familiar. We jump into our cars and drive down to the south of France using that route. I am talking about the south-eastern corner of Wales, the south of England, Paris, northern France, southern Belgium, southern Germany and the Turin-Milan axis. That is where most of the economic activity takes place, and that is why we have the structural funds that we have, and will continue to have for some time. We want to help to redress the balance.
I am delighted that Wales secured £1.3 billion in objective 1 funding for mid-Wales and the valleys, which have suffered particularly over the past 20 years. During that period, our GDP per capita relative to that of the rest of the UK, and the rest of the EU, has fallen, and the gap between Wales and the south of England—and between Wales and the rest of Europe—has widened. That must be dealt with in the EU.
My hon. Friend the Member for Doncaster, Central (Ms Winterton) described eloquently the advantageous impact that European funding could have on people, and I do not think that we can take that away. The right hon. Member for Charnwood (Mr. Dorrell) made a shameful contribution, dismissing structural funds as a return to the old-fashioned policies of the 1960s and 1970s. What nonsense! Anyone who has observed the successful way in which Ireland, for example, has used its structural funds will know that they can turn an economy around.
The secret lies in meeting the challenges, and ensuring that the funds are invested innovatively. They should be invested not simply to deal with people's needs, but to create an environment that will allow our regional economies to grow, develop and prosper throughout Europe. That challenge faces the entire United Kingdom. Over the past 20 years, not just Wales, but the north-west, the north-east, parts of Yorkshire and, certainly, Merseyside have been badly affected by the relative decline in wealth creation.
I am a great fan of the creation of the regional development agencies, which took place on 1 April this year. I think that they will go a long way towards helping us to disperse wealth creation more evenly—not to take

wealth from one part of the country and give it to another, but to ensure that the regions start to grow more quickly and evenly as we prosper as members of the EU. People not only in the whole of this country, but in the whole of Europe will be able to benefit from that.
Nevertheless, the creation of the regional development agencies also presents a huge challenge to Wales in particular. Along with Scotland, over the past 20 years, we have been lucky in having a competitive edge. The Welsh Development Agency has helped us to attract investment, especially foreign investment. During those past two decades, we have had a good record in regard to the attraction of investment to Wales, and the jobs that go with it. Now we shall have regional development agencies throughout the United Kingdom, notably the London development agency, which will be created next year. That will make it much easier for the UK to compete for the existing capital in the EU, and to secure it for its own regions.
It is vital that we invest objective 1 money so that our economies can grow in a sensible way. As I said earlier, the south-eastern corner of Wales is at the core of the consumer market in the EU, which is what makes it such an attractive investment location. Whatever strategy is adopted in Wales—through the House, or through the newly created Welsh Assembly—we must retain the advantage of an attractive investment location that can offer competitive prices, direct access to the marketplace and a good quality of life for those who live in the area. Objective 1 expenditure must complement the development of the area, so that the whole of Wales can benefit. We must take a strategic approach to ensure that we expand the whole economy of Wales.
That point brings me on to objective 2, which is another crucial area of structural funding. We have already quite rightly allocated objective 1 money in Wales to the less-favoured areas, and that is where it should go. It is critical that any objective 2 funding that comes to the Principality is spent just as wisely. We must take into account two considerations.
First, we must examine indices of social and economic deprivation in other parts of Wales. My constituency is a good example. As a whole, it looks like one of the most prosperous constituencies in Wales in terms of income per household, but some areas, such as north-east and southern Barry, and particularly the coastal strip, experience enormous and unbelievable deprivation. The last recorded statistics—the figures are a little dated, but they still reveal the level of deprivation—showed that the average household income, including gross income apart from housing benefits, was less than £60 per week per household. One has to think about that to appreciate the level of deprivation that that implies. Those areas should automatically be considered for objective 2 status merely on the basis of social deprivation.
More importantly, we must also consider the value of such investment for regenerating the economies of south-east Wales as well as the less-favoured areas. The whole coastal strip—Barry, the port of Cardiff and the port of Newport—contains a cluster of areas that suffer deprivation. Investment in major infrastructural programmes through objective 2 funding would benefit not only the industrial south-east, but the whole of Wales. However, that money must be allocated and spent properly.
Three major projects could make an enormous difference: the M4 relief road in south Wales to accommodate the increase in traffic that is bound to happen with continuing economic growth; the electrification of the main rail link to south Wales; and the dualling of the access road to Wales's only international airport. Access to that airport is a crucial future business link. Those projects would ensure that we relieved poverty and deprivation, and that we created jobs and a stable environmental and economic framework for future growth and prosperity in the area.
Objective 2 funding is vital, especially in light of the fact that we now have regional development agencies throughout the United Kingdom. The Minister and her colleagues must address the problem of the structural imbalance in economic growth throughout Europe, and ensure that it is more evenly spread. When the time comes to allocate crucial objective 2 structural funding—I know that it is not her responsibility, but I am sure that she has a dialogue with her colleagues—those two criteria should be met. Ministers must relieve deprivation and ensure that the funding goes into innovative projects that will facilitate future economic growth in south Wales.
I have no doubt that, if we adopt that strategy, my constituency and the region of south Wales, like many other outlying regions of the United Kingdom, can look forward to prosperity and continued growth for some time to come.

Miss Anne McIntosh: I am grateful to be called to participate in the debate, especially following the speech of the hon. Member for Vale of Glamorgan (Mr. Smith), who is such an eloquent advocate for his area. I am sure that there will be a lot in common between the two Vales.
The mood was set by the Foreign Secretary—a rather sombre tone against the background of the hostilities in Kosovo. I associate myself with the eloquent remarks of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Foreign Secretary.
I should like to say a few words about the state of agriculture and the missed opportunity at the Cologne summit to build on the agreement that was concluded in Berlin in March on reform of the common agricultural policy and of structural funds. An opportunity has been missed to go over the regrettable failure of farm Ministers to reach agreement.
In particular, I note that milk quotas will put great pressure on dairy prices in England, Scotland and Wales following an agreement that is favourable to Northern Ireland. I do not begrudge Northern Irish Members that, but it will put great pressure on other agricultural areas in the United Kingdom such as the Vale of York, and further depress milk prices.
The Berlin summit left the beef sector broadly unchanged as well, and failed to take the opportunity to run with rural development policy and environment policy. In the arable sector, intervention prices were reduced only by 15 per cent. in two years, not the 20 per cent. that was first sought.
It is important to put on record the fact that, as my right hon. Friend the Member for Fylde (Mr. Jack) has said, the Agenda 2000 reforms will not meet our obligations under the World Trade Organisation. That is regrettable.
I know that pig farmers and producers of other products in the Vale of York feel particularly aggrieved that there is no support for pork products, either from the Government or from the Commission, when the sector is undergoing probably its greatest ever crisis throughout the European Union. As we have so many pig producers in the Vale of York, they are especially damaged.
I am disappointed that the hon. Member for Harrow, East (Mr. McNulty) is no longer in his place and that he failed to take account of the fact that, in 18 years in government, the Conservative party tried to create fair competition in agriculture, not least in animal welfare. It is regrettable that, having banned sow stalls and tethers in this country, we have imposed an additional unilateral burden on our farmers, which no other producers—whether in Denmark, Holland or other countries in the European Union—will have to meet.
Farmers in the Vale of York are one of the largest employers; although, individually, they do not employ many people, they are a large employer overall. They have had certain expectations from the Government, who have disappointed them. The Cologne summit was an opportunity for those expectations to have been revived and satisfied.
It is fair to say that the business community has different expectations of the Government in relation to the European Union. Its expectations have been disappointed as well. As time is short, I take just one specific example. This week, we heard that we were going to have record delays in air traffic this summer. That will affect not just travellers, but, equally important, members of the business community who go out there to seek orders for UK plc. I regret that the Government have not used the opportunity of the Cologne summit—perhaps they still might—to put pressure on Eurocontrol once and for all to achieve a single air traffic control unit.
I do not think that we need to cede any more sovereignty to the Commission; it is not the right body to achieve that. However, if the Government could use their offices to put pressure on member states that have failed to invest the same amount in air traffic control equipment as this country has—under the previous Government, we were a flagship in that regard—it would be helpful in satisfying business customers that they will be able to travel to reach their orders throughout the European Union. Patently, they are not going to do so this summer.
The Government have placed great emphasis on social Europe, calling for a working time directive and a minimum wage. Conservative Members should like flexible labour markets to be established. We therefore oppose the working time directive and the minimum wage, which will not promote the flexible labour market that we want.
The working time directive will apply to everyone—unless one is a junior hospital doctor. I regret that that sole exemption will continue, for possibly up to 13 years, as it does not send a very good message to our very hard-pressed junior hospital doctors. Perhaps the Minister will be able today to give us a good reason why the exemption should continue.
In an earlier intervention—which the hon. Member for Doncaster, Central (Ms Winterton) kindly allowed me to make—I mentioned pig farmers. In North Yorkshire, we are concerned that pig farmers, and other farmers, will be the 1990s equivalent of the coal miners in the 1980s.
I therefore make a plea to Ministers to ensure that, when they consider structural funds, Agenda 2000 and the additional role that will be played by national Governments, and indeed by regional development agencies, the Vale of York and other areas in North Yorkshire will continue to benefit from Konver and 5(b).
In the past, under the previous Conservative Government, it was recognised that rural areas did quite well. We want to ensure that the current Government maintain the balance between rural and urban areas. There will, therefore, be a contest between Doncaster, Central and the Vale of York. Although I am sure that the Vale of York will come out on top in such a contest, I simply ask the Minister to ensure that areas that have benefited in the past will continue to do so.
Young people look to the European Union as a continent of opportunities, and perhaps as a place where they may be able to use their languages. The House may not know it, but I am a Rentokil scholar. Rentokil is a Danish—owned company, and I gained a six-month scholarship to study at the university of Aarhus. Now, partly on the basis of that six-month scholarship from Rentokil, I am in there—in the House of Commons—fighting for Yorkshire. I hope that young people will not be disappointed in their expectations—dragged down because of burdensome, interventionist policies, such as the working time directive and the minimum wage—but will be able to avail themselves of that continent of opportunities.
I also hope that the Cologne summit will make progress on some issues, thereby giving us a little taste or soupcon of next year's intergovernmental conference. Opposition Members are committed to enlarging the European Union, and particularly to bringing in central and eastern European countries. We want the EU to have a wider and broader membership in order to enlarge the marketplace.
I hope that the Government and our European partners will not shirk from making the tough decisions that must be made. Tough decisions on institutional arrangements must be made, such as on the number of Commissioners and—dare I say it—even on the number of Members of the European Parliament and other institutions. The Amsterdam treaty negotiations did not face up to making those decisions, but they will have to be taken either this year, at Cologne, or at next year's intergovernmental conference.
Cologne will be the threshold of decision making for the millennium and will set Europe's future direction. Just as Cologne will be a threshold for Europe, I am approaching a threshold in my own career. At the European elections, and after serving for 10 years in the European Parliament, I shall retire—being a very retiring Member of Parliament—from the European Parliament, and devote myself entirely to my constituents in the Vale of York, who I hope will receive a piece of good news in the Minister's reply to the debate.

Mrs. Louise Ellman: I welcome this evening's wide-ranging debate just as I welcome the Government's positive attitude to our participation in the European Union for the benefit of people in the United Kingdom. It is in marked contrast to the negative attitude

adopted previously, when local authorities such as Lancashire county council and other regional groups had to open their own offices in Brussels so that the people of our regions could have their interests represented.
I deplore the continuing negative stance of Conservative Members this evening. Indeed, the speech of the right hon. Member for Charnwood (Mr. Dorrell) should ring warning bells among the electorate as we approach the European elections. His denunciation of the European structural funds should be a warning to the electorate in the English regions. Critical aspects of objective 1 and objective 2 funding and other aspects of structural funding are still under negotiation. The right hon. Gentleman was saying clearly to the people of this country that if they elect Conservative MEPs, they will be supporting a point of view that is against the interests of the people of the regions at a time of critical negotiation.
It is clear from what has happened in recent years that structural funds have been highly effective in supporting regional economies. They are effective because they are targeted and linked with single-programme documents. Programmes have been worked out to meet the needs of the regions in which they operate. That is very clear in my constituency in the Merseyside objective 1 area, where £630 million of European funding has generated additional money leading to the investment of £1.5 billion in the Merseyside economy. That has resulted directly in 19,000 new jobs. It has produced a wide range of achievements including the regeneration of Queen's square. It has provided business support through the innovative Merseyside special investment fund which has led to the investment of £53.5 million in the Merseyside economy, supporting more than 260 businesses and 3,000 jobs. It has helped growing industries in the arts through support for organisations such as ACME£the Association of Cultural and Media Enterprises£and has supported infrastructure, which is essential for economic development. Projects have included the development of docks, railways and the airport. The investment has contributed to the development of skills for all ages throughout the population, and capacity building in local communities through the urban fund, for example, which has focused on areas of greatest deprivation.
I believe that the future success of European structural funds lies in the regional dimension. Britain has been very slow at recognising the importance of regions. In most of the rest of Europe, regional structures are well advanced and have helped to support their economies. Now, at long last, we have regional development agencies supported by regional chambers, which I hope will become directly elected regional assemblies.
Today, the Select Committee on the Environment, Transport and Regional Affairs, of which I am a member, published its second report on regional development agencies. The report stresses the importance of linking regional economic strategies developed in the regions of the United Kingdom with the use of European structural funding. One of its key recommendations is for regional development agencies to assume what is now the role of the regional Government offices in leading and co-ordinating European structural funds.
The report also recommends that the regional development agencies should assume the role of regional Government offices in leading skills training by contracting directly with the training and enterprise councils and business links. That would bring together


investment in our economy and the development of skills, linking that with European funds to enable the best use to be made of public and private resources. In looking at our regional economies, we must consider the importance of investing in business, investing in infrastructure and developing skills. We have to look at what we want in our regions, link that with European Union funding and put the funding sources together to have maximum impact in our economy.
That will be particularly important in the north-west. We need to develop a better transport system. We need to invest in freight and passenger rail services. We need to link up with trans-European fast routes. We need a fast rail link to the channel tunnel so that our economy can prosper. We need to support businesses and understand why the region has a low rate of business formation and survival. If we could increase that to the UK average, 100,000 additional jobs would be created and £4 billion would be added to our gross domestic product.
We need to support our growing tourism industry, which currently provides employment for 3,000 people in the north-west. We need to look at regional initiatives in the north-west, including developing trade with Ireland and with northern and central Europe. It means looking at the importance of diversifying our industries where they are vulnerable. It means developing the skills in our industry and our universities in a comprehensive way, embracing the information society so that skills and knowledge in our region can be applied to new circumstances to bring new jobs.
There is much more that this country can do to develop our regional policies. We need directly elected regional assemblies. We need to make regional interests more explicit at national level. We need to support regional representation in the reformed House of Lords through the regional chambers. We need to make it clear that we see regions as important not just for our economy, but for developing the interests of the people of this country, taking account of the views of all social partners in the regions.
Europe is far ahead of us in regional development. We are at a critical stage. We have our regional development agencies and regional chambers. We are developing our regional economies. We are to receive more significant funding from the European Union. It is time that we stopped being passive and thinking simply about how we can use the rest of Europe. We must become active participants at national and regional level. I hope that this debate contributes to moving us forward so that, as we develop our regional economies with all our social partners, we become fully part of the European Union—the Europe of the regions as well as the Europe of national Governments.

Mr. Michael Trend: The House looks forward with varying levels of enthusiasm to these six-monthly debates on the European Union that take place before the two major summits in the year. After the forthcoming Cologne summit, which will mark the end of the German presidency, we shall welcome the Finnish Government to the presidency, even though they are said to be increasingly anxious about inheriting a somewhat paralysed European Union.
Many important and interesting subjects have been raised today. The debate was ably opened for the Conservatives by my right hon. and learned Friend the

Member for Folkestone and Hythe (Mr. Howard), who made an important contribution on Kosovo. Many others also mentioned that subject, but if the House will forgive me I shall pass over it.
Our relationship with Russia was mentioned by several hon. Members, and that is an important issue at the moment. The hon. Members for Somerton and Frome (Mr. Heath) and for Ilford, South (Mr. Gapes) both asked difficult but important questions that the Government must consider. It would be interesting to hear the Government's views on the subject tonight.
Many other hon. Members made contributions relating to their areas. My right hon. Friend the Member for Charnwood (Mr. Dorrell) put the cat among the pigeons on that score, although I cannot decide whether it was a fat cat among pigeons, a cat among fat pigeons or a fat cat among fat pigeons. Anyway, we have heard much pleading for Members' constituencies or areas, and that is understandable although it also raises important and difficult questions.
Another theme ran through the debate tonight and that was accountability. Several hon. Members questioned, in different ways, the growing lack of accountability in many different aspects of the European Union and our relationship with it. That was brought out by my right hon. Friend the Member for Fylde (Mr. Jack), who made an excellent speech on agriculture. He wanted to reconsider how we scrutinise European legislation. My hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) was concerned about accountability to this House, and the hon. Member for Hornchurch (Mr. Cryer) told us that he had written to the European Parliament office in London in February asking some straightforward questions, to which there must be straightforward answers, and had not yet received a reply.
The current argument over Europe is first and foremost about the growing lack of accountability at all levels. In Cologne, the Council will deal with, among other things, how business is done in Europe. The Foreign Secretary has given us a list of the subjects that are likely to be discussed, which is helpful as far as it goes, but it does not go very far and does not give much detail. Ministers attend an endless stream of other important meetings, about which the House hears very little. Why is that? It is because there is no procedure in the House that obliges Ministers to explain what they are trying to do or to report the outcome of their efforts. As the Government increasingly do their business in Europe, it is vital to reconsider that issue. I heard what the Minister said earlier, but we need to look at our procedures.
It is the belief of the Opposition that Ministers should be required before any formal Council meeting—not just twice a year—to come before the House, put the Government's intended position and face questioning on a debatable motion, if necessary. Similarly, the process should apply after any Council at which Ministers have agreed any result differing from that which they sought to achieve. With the growing complexity of the United Kingdom's relationship with the European Union, there is a growing lack of accountability of Ministers to this House.
Many hon. Members mentioned the ECOFIN meeting today, including my hon. Friend the Member for East Worthing and Shoreham. We have seen one of the documents that emerged from that meeting, and the


German president in office, Hans Eichel, has told us that there was a big step forward and that the meeting expressed a broad willingness to achieve a compromise. What was that compromise? It is important that the House should be able to question the Chancellor of the Exchequer on those points.
The usual mechanisms are failing to discover exactly what is going on. That may be due in part to the Government's natural reluctance to explain to anyone, even this House, what they are up to. So-called new Labour shares with old Labour one shining, central belief that they know better how to organise people's lives than individuals do themselves. The man in Whitehall still knows best and now so does his friend in Brussels.
What are we to make of the fiasco of the Commission? That question was also raised by the hon. Member for Hornchurch. The finest moment of the Commission came when it resigned. The events speak for themselves, but it is clear to Opposition Members that—under orders from national Governments at the turn of the year—the socialists in Strasbourg intended to prop up the Commission for its remaining months. They were told to fudge it. They reached for the traditional standby of those looking for delay and set up an inquiry, in the hope that the problem had been kicked into the long grass. However, the animal that they let off the leash was not a docile French poodle, but some sort of lurcher, which lurched its way through the Commission, carrying the Commissioners with it.
Months later, the Commission still finds it difficult to find the door marked exit. The national Governments say that they have been tough on the Commission, but the Commissioners are still all in place and on the payroll. Many hope to be reappointed.
Would a British Government, after losing a confidence vote in this House, be prepared to go away, lick their wounds and then slink back into office a few months later, having dropped only a few of their more unsavoury characters? No: it would have been a bag and baggage job. A British Government in that situation would have gone at the moment of resignation. [Laughter.]
Labour Members laugh, but they must know that people who resign from this House go the same day. They leave in disgrace and cannot make a personal statement to the House, but this is different because it is the European Union. The system has been designed by professional politicians for professional politicians, not for people at large.
This is new Europe. The Government promised us a new Europe two years ago, and that is what we are getting. This is modern, and hon. Members should not bother themselves with the details: all is being taken care of by Ministers. We have to get used to the idea that accountability and trust is a one—way street. Either we trust the Government and their European allies-or partners, as they call them—or we can lump it.
Other hon. Members spoke about the single currency. Conservative Members have given countless examples and quotations from senior European figures that show that the commonly held view on the continent is that the euro is a political project as well as an economic one. The new Commission President himself has said that economic and political union are two sides of the

same coin. The matter could not be any clearer, but the Government—in the House and in their communications to the British public—say that the decision about joining the euro is purely a matter of economics.
No issue facing the country at the moment is greater than the question of whether we join the euro. No greater difference exists between the two major parties than the difference on this issue. Conservative Members relish the opportunity to make and win the case for retaining the ability of this House, which is democratically accountable to the British people, to determine our economic and political future.
What else have the Government to say about other policy areas affecting the development of the European Union over the next five years? On what programme or manifesto will new Labour go to the British people at the forthcoming European Parliament elections?
For the first time, as my right hon. and learned Friend the Member for Folkestone and Hythe so ably pointed out, a political party in the United Kingdom has failed to put together its own manifesto for national elections. The Government have signed up lock, stock and barrel to the Euro socialist programme. That is a damning indictment of their approach. In contrast, the Conservative party has published a British manifesto, made in Britain, for Britain. We will be accountable to British voters.
I want to clear up a point that various Labour Members have brought up during the debate. The confusion was begun by the Foreign Secretary—I am sure in ignorance rather than mischief—and concerned the manifesto of the European People's party. The Foreign Secretary was wrong to say that the whip, Mr. Perry, had a hand in drafting that manifesto. He did not, and neither did any Conservative MEP. The positions of responsibility listed by the Foreign Secretary are in the EPP parliamentary group, not in the party itself. The party drew up the manifesto, and Conservative MEPs had no involvement.
I am sure that the Foreign Secretary did not mean to mislead the House on this matter. He should know that the European Democratic Union—a different organisation altogether—has put together a common position. We are able to sign up to that position, at the same time as producing our own manifesto for the British electorate.
The electorate can hold us accountable on what we advocate and do in Europe. That is not true of the Government. The first secretary of the French socialists has kindly pointed out that the socialist document for which the Labour party is campaigning commits Governments as well as MEPs. European socialists are devising policies that bind British Governments before the British people cast a single vote.
One subject should be at the top of the agenda at Cologne. Enlargement is unquestionably the most important subject facing the European Union. Several hon. Members have referred to it today, and we shall hear more warm words from the Minister about the matter being well in hand and progress being made. Those over—familiar phrases count for nothing in reality. While applicant countries are making progress, especially in legislative terms—an enormous amount of hard work is being done—all of them know that preparing for success is far from achieving it.
Politicians in those countries are increasingly worried that the EU may not let them in. The Berlin summit was billed as a great moment of reform that would enable


enlargement, but it turned out to be a big fix for the interests of the current Governments of member states. As my right hon. Friend the Member for Charnwood said, the Berlin summit effectively funked enlargement. Government Members cheerfully admit in private that the whole matter will have to be revisited before serious progress can be made on enlargement. As my hon. Friend the Member for Vale of York (Miss McIntosh) said, the common agricultural policy will have to be revisited very seriously.
This is not good enough. The Opposition see enlargement as a historic duty of the highest importance. What hopes and aspirations will the Poles, the Czechs and the Hungarians have at Cologne when the British Prime Minister seeks a formula by which to claim that he has preserved the British rebate? It is his proud boast, but is it true? Of course not. When it is pointed out that the Prime Minister has sold future rebate, he says that that is a different matter, and that he did it in any case to help enlargement. Round and round we go. Nonsense is piled on nonsense. He says one thing, and does another, as my hon. Friend the Member for Esher and Walton (Mr. Taylor) pointed out.
Ten years ago, I had the honour of standing for election to the European Parliament in the old London, North-East seat. At that time, that seat was not a Conservative heartland. The only safe Westminster seat was Chingford, and it still is. The then right hon. Member for Chingford was full of practical help and many kindnesses as a candidate. The House will be unsurprised to learn that I detected a certain lack of enthusiasm in him for the cause as a whole. I would have served happily in the European Parliament had I not been defeated by many tens of thousands of votes by Mr. Alf Lomas.
I want the European Union to work in the interests of all the people and nations of Europe. Much can be done, but we must break away from the historic architecture to build a better organisation for the future. To be critical of how Europe is going is not to be anti-European. To be in Europe, but not run by it is the aspiration of my party, of the British people and of peoples across the continent. UK voters need to feel that politicians are accountable in a much more immediate way than the structures of the European Union can hope to allow.
With the left in charge, Europe is following the wrong agenda. It is moving towards higher taxes, more regulation and deeper and dangerous integration. At Cologne, the Government should press for a Europe that is flexible, not rigid, a Europe that is diverse, not uniform; and a Europe that is outward-looking and not building an exclusive fortress. Only the Conservatives will work for a Europe that does less and does it better. Only we believe that Britain should be in Europe, not run by Europe.

The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): As is usual in these debates, a wide variety of issues have been raised. Unfortunately for me, a common thread throughout the speeches was that they nearly all contained specific points for me to deal with in my reply. As I have only 15 minutes to answer all those questions, it is not merely a Herculean but an impossible task. However, I can write to hon. Members if they feel that I have not covered certain matters.
There were many interesting speeches. Indeed, many of my hon. Friends spoke effectively and movingly about the importance of representing their constituents on European

issues. That was clear from the speech of my hon. Friend the Member for Doncaster, Central (Ms Winterton), who mentioned the way in which Europe has helped and will be able to help in her area. Given that this debate is in the run-up to the European elections, it seemed entirely appropriate that hon. Members on both sides of the House should remind us of local and regional aspects of European policies. Certainly, my hon. Friends the Members for Vale of Glamorgan (Mr. Smith) and for Liverpool, Riverside (Mrs. Ellman) effectively referred to the situation in their areas, as did the hon. Member for Vale of York (Miss McIntosh).
I also commend the many speeches from both sides of the House that stressed the importance of an outward-looking European Union in various ways. It was important to stress, as did my hon. Friend the Member for Ilford, South (Mr. Gapes) and the right hon. Member for Fylde (Mr. Jack), the situation with regard to Russia and the importance of European engagement with Russia, which is why it has been identified as the subject of the first common strategy under the European Union's common foreign and security policy. I very much welcome that.
My hon. Friend the Member for Hornchurch (Mr. Cryer) mentioned the importance of developing countries. I hope that I will get an opportunity to pick up on one or two of the points that he made later, but he was right to bring developing countries into the debate on the European Union.
The hon. Member for Somerton and Frome (Mr. Heath) mentioned the middle east and the importance of ensuring that we do what we can to give the necessary momentum to the peace process, in particular in the light of the new Government in Israel.
My right hon. Friend the Foreign Secretary spoke at some length on the situation in Kosovo and responded to many thoughtful and probing interventions. He gave examples, which moved us all, of the extent of the suffering and the appalling experiences that have been inflicted on whole families—men, women and children—by Milosevic's troops. He also looked to the future—rightly in my view—and mentioned the work that the European Union wants to do to help economic recovery and progress throughout that region in a way that can make all the countries concerned feel that they can move towards and into the European mainstream.
Our proposals will be considered at the Cologne European Council. We wholeheartedly endorse the presidency proposal for a south-east Europe stability pact, which could provide a unique and multilateral forum, involving all the countries of the region in due course, and could help to create a future partnership based on core democratic values.
The United Kingdom Government are also contributing ideas for action in other international forums, such as the Organisation for Security and Co-operation in Europe, NATO and the international financial institutions, to ensure that those various initiatives do not duplicate each other, but can complement each other and be effective, in that important task.
Various questions were put to my right hon. Friend the Foreign Secretary. Although some may obviously be pursued with him directly, in answer to the shadow Foreign Secretary I can say that in NATO we are examining arrangements for an enhanced force to


underwrite a ceasefire in Kosovo and to provide security for refugees to return. It is envisaged as a NATO force, under a NATO command structure, and will provide the core for an international military presentation in which we would welcome the participation of other partners. The sense of direction is clear.
The hon. Member for Somerton and Frome asked my right hon. Friend the Foreign Secretary several specific questions about which I think that I can reassure him. There is no question of immunity for Milosevic and others, but those will be matters for the International War Crimes Tribunal. He also asked about territorial integrity. We are not advancing solutions based on partition, or partial or zonal arrangements of the sort that he mentioned.
I was pleased that my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) paid tribute to the efforts of the Foreign Secretary, which have been remarkable before, during and after Rambouillet. It is a record of which the country, and certainly the Government, are proud.
On internal European Union policy issues, I thought that our debate was interrupted by a disgraceful intervention on a point of order by the shadow Chancellor. I had already explained to the House what happened in ECOFIN, but he was not present when I intervened. As he had intervened, I thought that I had better check my information. In a short absence from the Chamber, I checked with my Department and the Treasury but the situation was as I had described it to the House. What happened at ECOFIN was very advantageous to this country and to the Chancellor's work. He has managed to move the debate on to a recognition of the particular problems of the eurobond market and financial markets in a way that did not exist before. We should recognise and pay tribute to his achievements.
I think that the shadow Chancellor should come to the House to apologise for his intervention. While I have him in my sights, I want to deal with a claim that he made in last week's debate on fraud in the European Union. I am not sure why, but he claimed that I had been forced to admit that we had done little to tackle such fraud. I do not know where he got that from. I said no such thing and would happily defend to the House in detail our record on tackling fraud and financial irregularities, at both national and European level. In the early days of the Government, we managed to get into the Amsterdam treaty a legal base to combat fraud against the Community budget. I hope that it can be used now that the treaty has come into force.
In January, the Chancellor proposed that the head of UCLAF—Unité de Coordination de la Lutte AntiFraude—should be boosted to make him independent of the Commission, and I am glad that that independence has now been agreed. Some hon. Members on both sides of the House expressed concern about the office being within the European Commission, but I defend that strongly because I know well from the past it is when people have had access to the system, the files and the information, that fraud has been uncovered. The proposal ensures that the head of the unit is independent and does not owe his

career or prospects to the European Commission. That independence is the key to tackling fraud effectively in the European Union.

Mr. Howard: Does not the right hon. Lady understand that it is possible for an independent body to have full access to all the documents and people that it needs while being outside the body that it is investigating? The Foreign Secretary gave no direct answer to the hon. Member for Falkirk, East (Mr. Connarty). Why will she not undertake to reconsider the proposal so that we can have an independent fraud investigating body outside the Commission?

Ms Quin: I have already answered the right hon. and learned Gentleman. We have agreed the best combination of independence and access to the information. That is what we believe is really important in tackling fraud. I am glad that that has now been agreed.
Many other points were raised and it will be difficult to cover them all in the course of my remarks. Although I enjoyed and appreciated many of the contributions that were made, I was somewhat depressed by the degree of inaccuracy in the speeches of many Opposition Members and by the repeated scare stories and assertions that have no foundation in reality. One Opposition Member said that it was a rarity for us to discuss European issues in the House. That is complete nonsense. Apart from the regular debates on progress in the European Union, statements are made and questions are answered after every European Council meeting. A variety of debates are held and evidence is given to Cornmittees; only last week, my right hon. Friend the Foreign Secretary gave lengthy evidence to the Select Committee on Foreign Affairs—quite rightly—on the prospects for Cologne. We have overhauled the European scrutiny arrangements in the House, which means that Members have a better opportunity to scrutinise European legislation than ever before. We are proud of our record in bringing such issues before Parliament. I should like Opposition Members to acknowledge that, rather than making constant wild allegations that we do not listen to them.
I struggled to find anything to agree with in the speech of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). I thought that I was going to agree with some of his comments about Kosovo when he said that we have a bipartisan approach—although his version of bipartisanship could most kindly be described as idiosyncratic. However, I agreed with him and his hon. Friend the Member for Windsor (Mr. Trend) about enlargement. Unfortunately, both of them gave a wholly inaccurate version of the Government's policy on enlargement. Instead of going slow, we are speeding up the enlargement process through our actions in the EU. I commend to them the speeches made by my right hon. Friend the Prime Minister in Romania and to Members of the Bulgarian Government, when he said that we would support an invitation to Romania and Bulgaria to open negotiations at the Helsinki summit. As the right hon. and learned Member for Folkestone and Hythe mentioned Romania and Bulgaria specifically, I was surprised that he did not acknowledge the work that we had carried out.
Furthermore, we recognise and encourage the aspirations of other states in the enlargement process, especially the other two Baltic states, Slovakia, which has made good progress recently, and Malta, which has



recently come back into the frame with its renewed application. A couple of weeks ago, I visited Malta and the Maltese are thoroughly preparing their accession negotiations, so that they will be in a position to take advantage of them when the time comes—despite the fact that the hon. Member for Chesham and Amersham (Mrs. Gillan) seems to be laughing at the prospect. That time will be as soon as possible.
The right hon. and learned Member for Folkestone and Hythe and his colleagues were keen to disown what he daringly described at one point as his sister parties in the EU. I think that he was also keen to disown some of his party's MEPs, who obviously work closely with the European People's party group. He should read the information that I found on the internet yesterday, in which the links of Tory Members of the European Parliament with the European People's party are trumpeted. The list of the key positions held by Tory MEPs in the European People's party is highlighted.
It is good to remind the House of what the allies of the Tory party are putting forward in the European elections. My right hon. Friend the Foreign Secretary rightly entertained us, but perhaps I could add something that he did not mention—the phrase in the European People's party manifesto that the party was committed to greater social integration.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

NORTHERN IRELAND GRAND COMMITTEE

Motion made, and Question put forthwith, pursuant to Standing Order No. 116 (Northern Ireland Grand Committee (sittings)),

That the Order of the House of 2nd December relating to sittings of the Northern Ireland Grand Committee shall have effect with the substitution in line 3 for the words '10th June' of the words `24th June'—[Mr. Clelland.]

Question agreed to.

BUSINESS OF THE HOUSE

Ordered,

That, at the sitting on Wednesday 26th May—

(1) the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the names of Margaret Beckett or Mrs. Marion Roe relating to—

(a) Line of Route not later than two hours after the Motion has been entered upon;
(b) Financial Assistance to Opposition Parties not later than one and a half hours after the Motion has been entered upon;

and the second Motion may be entered upon and proceeded with, though opposed, after Ten o'clock;

(2) the Questions referred to in paragraph (1) shall include the Questions on any Amendments selected by the Speaker which may then be moved; and

(3) the Motion in the name of Margaret Beckett relating to Select Committees (Quorum) may be entered upon and proceeded with, though opposed, after Ten o'clock.—[Mr. Clelland.]

PETITION

Immigration Legislation

10 pm

Fiona Mactaggart: I have the honour to present a petition signed by more than 3,000 supporters of Christian Action for Justice in Immigration Law. I think it is appropriate that I present this petition as the Member of Parliament for Slough. The petitioners are concerned about the divisions in Britain's nationality law that were created and entrenched by the 1968 commonwealth immigrants legislation. Although it was introduced by a Labour Government, the previous Members of Parliament for Eton and Slough, Joan Lestor and Lord Fenner Brockway, voted in this and in another place against that racially discriminatory legislation. The British Nationality Act 1981 continued many of the divisions, and it is still in force today. It introduced the situation that concerns the petitioners whereby children can be born in this country and not be British. The petition states:

To the House of Commons

The petition of Christian Action for Justice in Immigrations Law, its sponsoring organisations, citizens and residents of the United Kingdom

declares that UK immigration legislation has been deliberately framed to be interpreted in a racially discriminatory manner—as evidenced by Cabinet papers of 1955 and 1961—and racial discrimination is now entrenched in the 1981 British Nationality Act;

further declares that the building of a truly multi-ethnic Britain demands new and inclusive nationality legislation which redefines national identity to reflect the nature of British society after post-war immigration.

The petitioners, therefore, request that the House of Commons urge the Secretary of State for the Home Department to:

1. establish a single British nationality with equal rights for all who are our responsibility in international law.
2. restore the principle of British citizenship for all those born in the United Kingdom.

The petitioners remain etc.

To lie upon the Table.

Photovoltaic Energy

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clelland.]

Dr. Alan Whitehead: As hon. Members will know, the United Kingdom has signed up to a 12 per cent. reduction in 1990 levels of CO2 emissions and is likely to be one of the few countries that will achieve its initial commitments under the Kyoto protocol within the time scale that has been set. However, that target has largely been achieved by the environmental success of a policy—the so-called "dash for gas"—that was designed by the previous Government primarily for another policy purpose.
Gas power generation, although less profligate with CO, emissions then other forms of power generation, still relies on a fossil fuel and generates substantial amounts of CO,. As we approach the next stage of CO, savings—perhaps the UK's commitment of a 20 per cent. reduction in emissions—the curve of pain becomes steeper. There does not appear to be a second wave of magic solutions that will allow us to reach such commitments without pain.
One of the most promising avenues in that context is the aim of progressively replacing energy supply from fossil fuels with supply by renewable methods. The Government's commitment to supply 10 per cent. of energy by renewable means by 2010 is therefore laudable and is set out well in the recent consultative paper from the Department of Trade and Industry, "New and renewable energy—prospects for the 21st Century".
The paper singles out offshore and onshore wind power and biomass energy generation as the two most immediate technologies that will contribute to that target. In a clear and straightforward manner, the paper lays the ghost of the belief that renewable energy is the province of dreaming cranks. Scientific advances have made the contemplation of substantial energy generation by renewables a real and economically feasible prospect. Indeed, other countries have already almost achieved that. Brazil produces 80 per cent. of its energy from hydro-electricity or biomass conversion. Denmark is projected eventually to provide 36 per cent. of its total energy requirements from wind power.
It is therefore disappointing to read in the otherwise excellent consultative document that photovoltaics is regarded as a long-term prospect at best and does not feature strongly as a leading likely source of renewable energy. That is particularly disappointing because, of the leading sources of renewable energy, photovoltaics has, perhaps, recently enjoyed the most spectacular scientific development as a viable technology, but it is, possibly, why PV remains a marginal contributor, in the UK at least.
It is possible that received thought still believes that PV involves slinging huge, clunking solar panels on to the side of buildings, thereby offending passers-by and planning committees alike. It is possible also that the deeply ingrained British myth that it rains here most of the time, and when it does not, it is foggy, creates a belief that PV is fine in equatorial Africa but is not for the likes of us. On the contrary, modern PV installations work well with light, and do not need bright sunshine. Thin-film

technology means that typical PV installations need be no more obtrusive than the normal tiles on the roof of a house. Technological development is proceeding rapidly in, among other places, the sustainable energy research group at Southampton university in my constituency.
The failure to exploit PV represents not one, but two, lost opportunities for the UK. Not only are we denying ourselves the benefit of a viable and entirely renewable energy source, but we are starving a potentially economically important and world leading industry of the domestic market from which it could gain for its successful development. That market is expanding globally as quickly as that for mobile telephones or internet services.
The UK currently has 10 per cent. of the world's photovoltaics market, but almost all installations built or researched by UK companies are not in the UK. The photovoltaics industry in the UK employs about 400 people only. The lack of a mass production market in the UK leads to continuing high costs for PV installations, which in turn damps down demand further.
Furthermore, as I shall illustrate, contrary to the policies of a number of other countries with comparable climates, our regulatory arrangements consciously discriminate against the successful spread of PV. Germany currently has embarked on the 100,000 roofs programme, which is designed to establish that number of individual PV installations by 2004. Japan aims to supply 4,600 MW from PV installations—an output equivalent to that of four fossil-fuelled power stations—by 2010. The USA plans for 1 million roofs to be powered by PV by 2010. All those schemes are supported by a form of underwriting in the first instance, through regulation of the purchase regime for energy or through installation grants.
Other countries do not regard PV as a long-term technology; they are investing in PV programmes now. Those programmes are inevitably stimulating manufacturers and supplies based in those countries. Already, one of the leading solar energy developers, BP Solar, has announced that, tragically, it is moving most of its activities to where the market is—the USA—following the company's takeover of Amoco. By contrast, Britain has just announced an experimental programme, which is welcome in context, to underwrite PV installations on 100 roofs, at a cost of £1 million.
I do not want to argue only on the basis that the British have a habit of being left behind in the commercial application of new technologies. I want to argue for the development of a self-sustaining market in the UK which may require some support at the start but which, with proper assistance and regulation, could, in a relatively short time, supply substantial elements of UK domestic and commercial power needs at competitive prices.
The reason why such a market is eminently feasible in the UK lies in our high degree of urbanisation. Other forms of renewable energy require fast-flowing streams, windy headlands or set-aside land on which to grow willow. One cannot develop those technologies in urban areas, but 80 per cent. of us live in towns and cities, under that great unexploited resource of the modern age: the urban roof. The average south-facing roof can sustain PV tiles that can generate upwards of 2,000 units of electricity per annum, when the consumption of the average household runs only to about 2,500 units a year.
In other words, one's own roof, doing nothing but staying where it is, can replace 80 per cent. of one's electricity requirement year in, year out. To put it another way, each square metre of installed PV on a roof saves more than 1 tonne of carbon emissions from fossil fuel energy over its projected lifetime of 20 years.
There are severe impediments. I have already mentioned the cost, which largely derives from the lack of the economies that large scale production brings. At present, to install solar tiles producing 2,000 units a year would cost about £8,000. I believe in putting my money where my mouth is. I am actively investigating the feasibility of installing PV tiles on the south-facing roof of my own home, but the installation cost currently means that, despite my inflated salary as a Member of Parliament, I must act from political commitment to do that now, rather than from the reasonable economic self-interest to which an economically viable industry should work.
The installation cost is further exacerbated by a regime of energy charging and payment that can be described only as acutely discouraging. It is possible for small producers to receive payment for supply to the national grid. Wind turbines and other renewable programmes work on that principle, but the regime for PV is uniquely punitive.
If one has a PV roof installed, one will consume energy from the grid at some times of the year, such as during the winter. In summer, one is likely to supply substantial amounts of energy to the grid, but one will face two hurdles. First, electricity companies require two meters to be installed at considerable cost, although the technology exists to install a two-way net meter at a much lower cost. Secondly, one pays five times as much for energy received from the national grid—for example, during the winter—as one is paid for supplying it during the summer. Not surprisingly, therefore, the equation does not balance very effectively at present.

Mr. Gareth R. Thomas: My hon. Friend is making an excellent case. Is he aware of the German electricity feed law, which in some of the Lander guarantees a rate for electricity from renewable sources of up to 90 per cent. of the price of electricity sold through the grid? Is that not in stark contrast with the attitude of British companies? Would not a sustainable energy agency help to resolve such difficulties?

Dr. Whitehead: I am delighted to hear that telling point from my hon. Friend, who I know will shortly present to the House a ten-minute Bill on the subject.
In Germany and other countries, the ratio of energy supply to energy receipt is much more balanced. The situation in the UK resembles nothing more than a rip-off by the electricity companies, if I may use the vernacular.
If we discount the high hurdles that my hon. Friend illustrated by reference to other countries, there are compelling arguments for the inclusion of PV as an early rather than a late entrant to the armoury of a UK renewables programme.

Mr. David Drew: I was fortunate to hold a consultation meeting last Friday on the Government's renewable energy paper, which was well received. I noticed that there were advocates for wind energy and

for hydro-energy, and that they were well organised. Although everyone present was in favour of photovoltaic energy, there did not seem to be the same organised effort to get it into play.

Dr. Whitehead: My hon. Friend makes an important point. There are relatively powerful advocates of various kinds of renewable energy. One of the attractive and powerful features of the consultative document is that it demonstrates how a mesh of different forms of renewables can make a contribution together. My point tonight, which I think is shared by my hon. Friend, is that photovoltaic energy seems to have been left behind, to the detriment both of the development of the British PV industry, and to the contribution that it can plainly make to the future of renewables.
It will take some imagination on the part of Government to put PV back on the starting line of a good quality UK renewables programme. That imagination is needed to create the climate whereby such an outcome could be achieved and business, unlike that in other forms of renewables, would simply and quietly proceed. There would not be anguished discussions about the intrusion of turbines on the landscape, the damming of a beautiful valley for headwater or the ecological effects of a monoculture for biomass generation. A large number of roofs would simply change colour over time, from red to dark brown.
What imaginative measures are needed? First, the regulator could easily and simply require that a level playing field for PV-supplied electricity should be established through a fair remuneration policy and a net metering regime. That in itself would transform the economics of PV installations. In that context, I am greatly encouraged by the positive reply to a written question that I received today from the Minister, and I thank him for that.
Secondly, we are not at an experimental stage with PV. Welcome though the 100 roofs programme is, as an advance on nothing, do we need to demonstrate the technology? Perhaps we should instead place more emphasis on underwriting the move away from pilots towards large scale production which would, in itself, produce the economy of operation needed for long term United Kingdom viability. Installation grants and guarantees in respect of a larger number of roofs are perhaps the best way to develop capacity in the long term.
Thirdly, we need long term support for the development of the United Kingdom PV sector. A modest target for United Kingdom companies to have 15 per cent. of the world PV market by 2010 would provide an enormous and ultimately self-sustaining boost to jobs and production in this country. Government research and development and production support would be, and should be, short term and finite. The key is to boost and mature the United Kingdom's position, not to subsidise it eternally. The most immediate way of achieving that would be to include in future non-fossil fuel obligations a specific tranche for PV—perhaps 10 per cent. of the total.
Fourthly, we need to recognise that our energy supply is heavily subsidised, and has been over a long period. Between 1990 and 1995, £4.6 billion went to subsidise fossil fuel and an astonishing £ 11 billion went to subsidise nuclear power. During the same period, only £0.3 billion, or only 2 per cent. of all subsidies, went to renewables.


A modest redirection of short term subsidy—perhaps aimed at solar mortgages at reasonable rates, installation grants or value added tax reductions on installations—would give a cost-effective push to the establishment of clean energy in a way that subsidies to energy production have signally failed to provide to date.
Generally, an exemption for renewables from the proposed energy tax would be a great help to the successful development not only of photovoltaics, but all renewable energy sources. The ultimate benefit would be a power source that would be taken for granted but would be entirely sustainable. It would be no great adventure to install units on roofs as houses were built and it would be unremarkable that shops, garages and office buildings had unobtrusive PV generators built into their fabric.
That is the case with a few pioneering buildings in the United Kingdom and a good example, which is close to my home, is the 7.2 kW installation on a new building on the Highfield campus at Southampton university. The building is remarkable because it is remarkably like an ordinary building. BP will shortly install similarly unremarkable PV generation capacity on the roofs of all its service stations.
By backing PV alongside other renewables, we would achieve the best outcome —a sustainable society that would look and feel like society does at present. We would still live a pleasant and sophisticated urban life with all that goes with it. The difference would be that we would be using our urban environment to make that life possible rather than depleting the rest of our world through the demands that our urban living makes on it.

The Minister for Energy and Industry (Mr. John Battle): I sincerely thank my hon. Friend the Member for Southampton, Test (Dr. Whitehead) for securing the debate. In the House and elsewhere, he is proving to be a champion of solar power, and photovoltaics in particular, and I welcome other colleagues who have stayed to join in tonight's debate. Although we have had one or two debates on renewable energy, I think that this is our first on solar energy. I am absolutely sure, however, that I will not be able to give him all that he asks for. In all sincerity, I urge him to continue to champion this example of renewable energy.
I represent inner-city Leeds and live in one of my constituency's terraced houses. I dream of the day when we can use solar power to heat our homes. We have fewer centrally heated homes than any other constituency in Britain. Fuel poverty is a massive problem, and I think that if we can crack it we really will have the energy efficiency and home warmth that we envisage for the future.
The role of sustainable development is clear. That includes tackling what some would call not climate change, which is too benign a term, but climate destabilisation. The subject arose at a meeting with the International Energy Agency only today. Climate destabilisation will cause a massive on-cost as people pick up the bills for floods, rising tides, storms and so forth. We should aim for economic, social and environmental objectives simultaneously, so that we can meet environmental imperatives while also providing the

energy services that people need at a reasonable cost. The challenge will necessitate the use of certain technologies involving new, alternative and renewable sources of energy, as well as combined heat and power.
I do not want to set one renewable energy source against another. Energy from wind, water, biomass and waste, and solar energy can blend in local communities to provide precisely the mixture that is needed for the future. Renewable energy will contribute to the meeting of our Kyoto commitments, and our Government's targets for the tackling of carbon dioxide emissions and greenhouse gases.
I am proud to say that, under our presidency of the European Council of Ministers, I chaired the Energy Council. We put the renewables paper on the agenda. We are bringing renewables in from the margins. It may be said that we are doing so in too modest a way, but we are getting there. What is certain is that new and renewable energy sources are essential components of any cost-effective climate-change strategy.
As well as considering the possible contribution of renewables to sustainable energy supplies, the review that I launched assessed their potential contribution to the meeting of future greenhouse gas reduction commitments—in particular, our target for a 20 per cent. reduction in carbon dioxide emissions by 2010. Our 10 per cent. renewables target alone could lead to a reduction of some 5 million tonnes of UK carbon dioxide emissions, a valuable contribution in itself.
We already generate 2 per cent. of our electricity from renewables, and we are on target to achieve 5 per cent. by 2003. The fifth non-fossil fuel obligation round of the 261 projects involves consideration of onshore and offshore wind generation; it also features examination of biomass and wave technologies. Such techniques could take us beyond the 5 per cent. target, and towards 10 per cent.
Let me point out to my hon. Friend, and to my hon. Friend the Member for Harrow, West (Mr. Thomas), that there is a difference between the non-fossil fuel obligation—which is a price support system for people who build new power stations to generate energy—and grants that people need to make their homes more energy-efficient. I am not sure whether the NFFO mechanism is the right one.
I announced in the consultation paper that accompanied the new and renewable energy paper that the funding of our research support programme would increase from the present £l11 million a year to £18 million a year in three years, totalling more than £43 million over the period. That will reinforce our attempt to promote renewable energy sources.
We do attach importance to technologies such as PV, the use of fuel cells and wave energy, and I believe that they will make a significant contribution. We are not attempting to neglect or overlook them. However, the work that has been done under the Department of Trade and Industry programme has been aimed at assessing PV technology, and dealing with some of the barriers to its introduction and development. The Foresight Scolar programme has evolved, installing PV in more than 100 schools in an effort to gain experience of installation.
I think it fair to say that there has been support for solar technologies over the past 20 years. We have doubled the budget for PV to £1 million. What we have discovered is


not that it does not work; it does. The technology is there, and we know how to make the equipment. The key issue is that this form of energy costs too much in Britain when it is competing with other forms of energy in the market place. That is the real challenge.
My hon. Friend asks how we can get the costs down when that cannot be done through a mass market. I am not sure that I could convince my right hon. Friend the Secretary of State for the Environment, Transport and the Regions, or my right hon. Friend the Minister for Local Government and Housing, that there was a quick and easy way for everyone to be given a £12,000 grant to install such systems in their homes immediately.
The Treasury is considering other energy efficiency measures. It is not that the technology is not viable: it can do the job. The key question is how we get it into homes, such as the terraced houses in my area, at a price that people and the Government can afford. At present, it is too expensive for general application in the United Kingdom, although I think that it will make a significant contribution in the future.
A typical 2 kW system on a domestic roof would cost between £10,000 and £15,000, which, over the lifetime of the system—20 to 25 years—would work out at about 35p to 50p a unit compared with the present retail price to the consumer of 7p to 8p a unit. That cost will come down as standardised systems are developed and efficiencies of bulk production come into play, but from the evidence we have it is likely to be at least a decade before PV is price competitive with other sources of energy and other energy efficiency measures.
In the domestic sector, periods of maximum supply do not match periods of demand, so there is not the scope for off-setting savings compared with gas condensing boilers and the like.
NFFO is not the ideal model, and we must try to get through the barrier of costs. The purpose of the programmes that the DTI is introducing is not to assess the technological aspects of PV, but to consider the financial and market barriers to introducing it now. Can we get it into the marketplace and reduce the cost within the next decade?
We have a programme that has funded studies to tackle the barriers, we have established guidelines for the building industry on the testing, commissioning and monitoring of PV systems, and we have produced technical guidelines for grid connection of small PV systems and a design guide for building integrated PV. The programme has already funded installations in Northumbria university, Dr. Roar s eco-house, the solar panels at the Ford factory at Bridgend, which I have seen, and the Doxford solar offices. We keep pushing the theme, so that it catches on in that sector of the market, and that is starting to happen.
In February, at a conference in Manchester, I announced three initiatives that will take our support for PV up to a new level. They involve an investment of £15 million over three to five years, some £5 million of which will come from my Department. First, we have called for proposals for the development of PV components and systems. That will be an extension of the work already funded, but will be concerned with hardware development rather than paper studies. We want to get the technology into the developmental stage. That budget will be about £1 million, and projects will get between

25 per cent. and 50 per cent. of the total cost. They will involve collaboration between small and medium-sized enterprises.
Secondly, we have set up a field trial of about 100 homes across the country, mainly involving new build, to test the installations under UK conditions and to consider sizing of systems, types of building, different technologies and the difficult grid connection and metering issues to which my hon. Friend referred. We hope to produce from that a builders' design manual for a large-scale domestic demonstration programme.
The third initiative is the design of a scheme for demonstrations of PV in large-scale building applications. The idea is to establish best practice, and to use the buildings as a showcase for UK technology and design.
I am often asked to compare our schemes with programmes elsewhere. I have asked my counterparts how they are getting on with their projects. In the United States, the programme for 1 million solar roofs involves solar heating systems, not PV. That needs to be said, because Congress has not voted for grants to be given. In Germany, the 100,000 roofs programme is in the form of soft loans to cover 40 per cent. of the costs, so householders have to pay back the loan and raise the other 60 per cent. Their domestic energy costs are high, so it is slightly more price competitive for them to go into solar systems. I am not ruling out such programmes, and I am happy to consider financial models to see how we can get the investment. Lastly, the Japanese sunshine programme has not yet started to meet its ambitious targets because of the recession and, I am told, people's desire to hang on to their savings at present.
My hon. Friend the Member for Test mentioned the subsidies under the previous Administration to the nuclear and other industries. I say only that there are no subsidies now. We have picked up the tab for cleaning up and decommissioning the nuclear industry, as well as paying out in relation to the legacy of the coal industry, but there are no subsidies to switch directly. I make that plain: I cannot offer to redirect subsidies because they are not there to be redirected. The situation has radically changed.
I have been closely following progress with building-integrated PV. As I have mentioned, we are supporting that where we can. I recently visited the Centre for Alternative Technology in Wales, where there are directional PV rays, which enable people to crack the problem of non-south-facing homes, so the technology is moving on. It is a case simply of having the capacity to crack the problem of the financial instruments. My hon. Friend the Member for Test mentioned the notion of solar mortgages. Let us explore that in more detail in the light of his comments. I am more than happy to look again at the question of two-way net metering.
My hon. Friend said that 80 per cent. of people in our society live in cities. It is thus an urban challenge. It is a challenge for houses and terraced streets. In Britain, many homes do not get knocked down and rebuilt; it is a refurbishment problem. As well as looking at using PV in new build, I want to look at how we can use it in refurbishment projects, so that when, for example, there is enveloping of whole terraced streets across the roofs, PV is part of the whole infrastructure.
That will mean looking at grant and mortgage arrangements differently, and at the funding of housing associations differently, but what my hon. Friend the Member for Test has done tonight, along with colleagues, is to insist that we inject some longer-term vision into the practical possibilities. I am more than happy to continue to work with colleagues on that agenda.
The key role of renewables will be in the medium and longer terms. Over time, we will have to reduce our dependence on fossil fuels. We will need to turn increasingly to energy efficiency and non-fossil sources.
We hope to meet the 10 per cent. target by around 2010. We think that we can achieve that, but it is a modest starting point. We will have to move on a lot further than that as we move into the 21st century. PV will then come into its own.
Recently, I was encouraged when I visited a company that makes PV on a small scale. It is undertaking a development project—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-eight minutes to Eleven o'clock.